The naira yesterday weakened against the dollar, sliding to N790/$ at the parallel market due to dollar scarcity that has pushed demand higher than supply.
At the Investors and Exporters Forex (I&E) Window- now the official market rate- the naira is quoted at N442.85/$, data on the CBN website showed.
The local currency has been relatively stable at this window used for official transactions, but bulk of retail transactions happen at the parallel market.
The fall of the naira at the parallel market happened a time inflation accelerated to a 17-year high of 21.09 per cent for October, led by rising fuel costs, an forex scarcity and disruptions to the global food supply chain.
Forex Trader at AZA Finance, Ikenga Kalu, said severe flooding across many parts of Nigeria, resulting in significant loss of farmland, has squeezed domestic food supplies and pushed prices higher.
He said: “The Economic and Financial Crimes Commission -EFCC- said it has arrested some bureau de change operators and currency speculators in an attempt to ‘sanitise’ the FX market, which it says helped the Naira recover from its record low 865 hit in early November. We expect to see further weakness in the days ahead as businesses take advantage of the relative dip to meet dollar needs.”
Global Chief Economist at Renaissance Capital (RenCap), Charles Robertson, said Nigeria is in a difficult position and needs to increase its dollar earnings and other revenue to support the naira.
