Naira crashes against dollar at parallel market over Coronavirus

The crash was as a result of the decline in crude oil price, which was influenced by the Coronavirus pandemic.

Naira crashes against dollar. (Image used for illustrative purpose) [Premium Times]

The crash, according to the President, Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, was not unconnected to the crude oil price which fell drastically in the international market to as low as $35 per barrel.

Gwadabe said the drop of oil price, which was as a result of the novel Coronavirus outbreak, has raised speculations among BDC operators in the country, which he said is not necessary.

“With the fall in oil crude oil prices on Monday, we witnessed a lot of foreign investors portfolio dropping their assets, most especially to convert to cash.

“The movement was as a result of recklessness on the side of the operators, when they want to speculate, but there is no reason for such because the Central Bank of Nigeria had continued to maintain support for liquidity to the BDC sub-sector," Punch quoted Gwadabe as saying.

While noting that the dollar sold for over N400 on Thursday, Gwadabe said sanity was gradually returning to the sector as dollar later sold for N375 by the close of the day.

The ABCON boss said the Central Bank of Nigeria (CBN) had maintained stability at N360 in more than three years, adding that the apex bank had warned BDC operators against contraventions.

According to him, the CBN wanted to revoke the licences of some BDCs for various infractions but fined over 100 BDCs over N5 million for various offences.

Meanwhile, CBN's Director, Corporate Communications, Isaac Okorafor has expressed dismay at speculations making rounds at the foreign exchange market.

While noting that the speculation is triggering panic that the CBN will devalue the Naira, Okorafor maintained that market fundamentals do not support the Naira devaluation at this time.

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