Naira Slides Further As Dollar Shortage Hits Banks

The huge gap between the demand and supply of dollars in the banks and at the parallel market has continued to worsen the value of the naira.

In less than three weeks, the naira lost N100 after sliding from 860/$ to 960/$ at the parallel market as of Friday.

Before the Central Bank of Nigeria enabled the free float of the naira against other global currencies in June, the naira had traded at 471/$ at the Investor & Exporter window.

However, on June 13, a day after the regulator floated the local currency, the naira increased to 664/$ the next day.

However, the naira which traded in a close margin at both the official I&E window and parallel market soon began to experience huge volatility in the black market.

After crossing the N900/dollar ceiling at the parallel market last week, the local currency tumbled to 925/dollar in Lagos.

The development came as dollar shortage hits banks with several lenders complaining of not having enough greenback to meet customers’ demand.

At the parallel market, currency dealers also complained of dollar shortage.

Bank officials stated that the CBN removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.

As a result, he said the demand for the dollar had outweighed the supply significantly.