The bashing of the Nigeria currency continues as it crashed further against the United States dollar from 215 to 220 at the Bureau de Change segment of the foreign exchange market today
Analysts sat this could be as a result of the closure of the Retail Dutch Auction System and Wholesale Dutch Auction System window by the Central Bank of Nigeria.
The naira also weakened to 199 to the dollar at the interbank market, compared to 197 on Wednesday. The CBN had on Wednesday said all demands for foreign exchange should be channeled to the interbank market, adding that only genuine demands for foreign exchange would be met.
In a telephone interview Thursday, President of the Association of Bureau de Change of Nigeria, Aminu Gwadabe, said that the closure of the RDAS could further affect access to foreign exchange by the BDC segment of the market. He further said that the dollar, which has gone to 220 at the close of the market today from 215.5 Wednesday, might even be scarce to get for the same 220 because demand is higher than supply.
Gwadabe predicts there would be continuous volatility Friday in the market except the CBN, as promised, continues to intervene at the interbank. “Before the closure of the RDAS, the CBN had stopped selling its money to the BDCs through the RDAS for the past three weeks or so. We have been accessing foreign exchange through the interbank. Technically, what they are saying is that it is going to be a one-rate system.”He said
There are over 2,500 BDC operators in the country. At the BDC, the process of buying dollars is less rigorous but the operators usually sell in small lots, compared with the interbank market, which can transact over $100m a day.
