Naira slumps to 370 on black market as dollar demand resurfaces

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    LAGOS, Aug 23 – Nigerian naira fell on the black market on Wednesday, pressured by demand for dollars from Muslim pilgrims travelling to Saudi Arabia for the haj and individuals paying for school fees abroad.

    The naira was quoted at 370 to the dollar on the black market on Wednesday as against 368 naira its previous session, traders said.

    The currency has traded within a range of 359 to 366 naira to the dollar for investors and on the parallel market over the past two weeks. It is stuck at around 305 levels on the official market boosted by central bank intervention.

    Nigeria has at least five exchange rates — including for the haj — which it has used to mask pressure on the naira. The central bank has been working to converge the rates through regular dollar sales.

    On Wednesday the bank announced that it will sell the U.S. currency to clear backlog demand for airlines and to importers of petroleum products and raw materials.

    Traders said demand has resurfaced in the past one week as private individuals with certain expenses in hard currency source for dollars.

    Nigeria’s parliament in July recommended that Muslim pilgrims travelling to Saudi Arabia this year should be able to buy their dollars for 200 naira, far below the official rate.

    Aminu Gwadabe, president of the Bureau de Change operators told Reuters that pressure was coming from pilgrims travelling for haj and that central bank had not granted any concessions.

    Gwadabe said dollar liquidity among exchange bureaus was low as some of his members refused to participate at a central bank currency auction over tight margins as the regulator tries to converge the different rates on offer.

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    Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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