ABUJA (Sundiata Post) – The value of the naira declined by 1.87 per cent at the parallel market on Thursday on the back of rising demand for foreign exchange as Nigeria’s external reserves hit $24.759 billion having declined by 2.59 per cent within the month.
The 30-day moving average of the external reserves was $25.417 billion at the beginning of September but had shed $647.837 million within the month as the Central Bank of Nigeria continues to supply foreign exchange at the interbank end of the market.
At the parallel market, increased demand for the greenback saw the value of the naira plummet to N436 to the dollar yesterday as against N428 to the dollar which it sold on Wednesday. The naira sold at N555 to the British Pound in Thursday as against N550 which it sold earlier while to the Euro, it sold at N472 from N468.
Liquidity crunch at the interbank market deepens, importers say they have turned to the parallel market to source foreign exchange, further increasing the demand that had plunged the black market end since the exclusion of 41 items from the eligible for foreign exchange list.
The value of e currency however remained stable at the interbank market where it sold around N314 to the dollar. Traders say they expect the naira to weaken further in the next week mainly due to fears of constrained supplies of dollars.
With the external reserves down to an 11 year high, traders said there had been no significant policy response to the fall in the reserves, further fuelling the concerns. The Monetary Policy Committee of the apex bank had at its last meeting retained benchmark interest rates at 14 per cent in its efforts to lure in foreign portfolio investors that would drive liquidity in the foreign exchange market.