Naira Continues Decline as Dollar Sales to BDCs Face Turbulence

The Nigerian Naira witnessed a further decline in both the parallel and official markets amidst renewed speculation and hoarding. This decline coincided with a withdrawal of some Bureaux De Change (BDCs) from the Central Bank of Nigeria’s (CBN) dollar sales program.

Despite nationwide efforts to curb street currency trading, the Naira fell to N1,435 per dollar in the parallel market and depreciated to N1,421.06 per dollar in the Nigerian Foreign Exchange Market (NAFEM).

Data from the Financial Markets Dealers Quotations (FMDQ) revealed a notable depreciation, with the indicative exchange rate for NAFEM dropping to N1,421.06 per dollar.

The margin between the parallel market and NAFEM rates widened to N13.94 per dollar, indicating growing disparities.

The CBN, in an attempt to stabilize the forex market, resumed dollar sales to BDCs in February. However, complaints have arisen regarding the slow disbursement of dollars, with some BDCs experiencing delays of up to three to four weeks between payment and disbursement.

In response, some BDCs have requested refunds from the CBN due to uncertainty and prolonged delays in receiving allocated dollars.

Anonymous sources within the BDC sector expressed frustration, citing inadequate supply from the CBN and erratic intervention patterns. Speculation and hoarding have resurfaced, contributing to the Naira’s sustained depreciation over the past three weeks.