Business

Naira Slides Further As Dollar Shortage Hits Banks

Published

2 years ago

August 14, 2023

The widening gap between the demand and supply of dollars in the banks and at the parallel market has continued to worsen the value of the naira, findings by The PUNCH have revealed.

In less than three weeks, the naira lost N100 after sliding from 860/$ to 960/$ at the parallel market as of Friday.

Before the Central Bank of Nigeria enabled the free float of the naira against other global currencies in June, the naira had traded at 471/$ at the Investor & Exporter window.

However, on June 13, a day after the regulator floated the local currency, the naira rose to 664/$ the next day.

However, the naira which traded in a close margin at both the official I&E window and parallel market soon began to witness serious volatility in the black market.

After crossing the N900/dollar ceiling at the parallel market last week, the local currency tumbled to 925/dollar in Lagos.

On Friday, the naira reached a high of 799/$ before closing at 740.60/$ at the I&E forex window. However, at the parallel market, the naira closed at 930/dollar in Lagos and 960/$ in Abuja at the parallel market.

The development came as dollar shortage hits banks with several lenders complaining of not having enough greenback to meet customers’ demand.

At the parallel market, currency dealers also complained of dollar shortage.

Bank officials said the CBN removal of cash deposit limits on domiciliary accounts in June had led to the repatriation of funds through the banks.

As a result, he said the demand for the dollar had outweighed the supply significantly.

“Some of the dollars are being repatriated through the banks but the demand is still higher than supply because everyone is still sourcing for dollar for imports, PTA, BTA, others,” an official of a lender, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, said.

“Nigerians are still hoarding dollar, customers are still hoarding FX because they don’t trust the policy. Banks are not getting forex supply from the CBN regularly like before,” he added.

Also, an official of tier-1 bank, who pleaded anonymity, said, “Before, the banks used to get dollar from the CBN every week but now, it has reduced drastically; we have not been getting again. Banks are sourcing for forex everywhere. The banks don’t have enough. We have not been getting supply from the CBN for weeks now.”

The President, Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, in a chat with our correspondent, said liquidity squeeze in the FX market had continued to put the naira under heavy attack from speculators.

He said, “The dwindling supplies in the I&E window shifted the demand to the parallel market where volatility and spikes is most pervasive. The entire forex market is plagued by liquidity shortages.

“The banks, as a result of the supply shortages, are limiting their available position for the financing of visible letters of credit and abandoning the invisible request like PTA, school fees, medicals of their clients and inadvertently adding more pressure in the parallel market.”

He added, “As it is, most licensed BDCs due to their demand for KYC requirement have lost their clients to the parallel and undocumented space with no regulation and standardisation. It is indeed a difficult time for most of our members as we are excluded from the harmonised market.”

Proffering solutions, Gwadabe said Nigerians should aspire to have a stable exchange rate devoid of illegal economic behaviour like arbitrages, hoarding and panic buying.

“ABCON is desirous to partner the apex bank and the Federal Government for an elaborate dialogue and engagement to champion paths to naira recovery,” he said.

He added that the financial architecture should be reviewed to include BDCs in the harmonised markets.

The monetary and fiscal authorities should create enabling environment and friendly policies, he said.
VANGUARD

Business

Naira Appreciates At Official Market

Published

3 weeks ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.

Business

BREAKING: Again, Dangote Refinery Cuts Petrol Price

Published

3 weeks ago

May 22, 2025

Editor

The Dangote Petroleum Refinery has announced a nationwide reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, with new prices now ranging between ₦875 and ₦905 per litre, depending on location.

The ₦15 per litre cut applies across all regions and partner fuel stations, and was confirmed via an official announcement posted on Dangote Refinery’s social media channels on Thursday.

Major marketers participating in the new pricing regime include MRS, Ardova, Heyden, Optima Energy, Techno Oil, and Hyde Energy — partners in the distribution of Dangote-refined products.

Under the previous pricing structure, Lagos residents paid ₦890 per litre, while prices reached ₦920 in the North-East and South-South regions. With the latest adjustment, Lagos now pays ₦875 per litre, while the North-East and South-South will see prices drop to ₦905.

A regional breakdown of the revised prices is as follows: Lagos: ₦875, South-West: ₦885, North-West & Central: ₦895, North-East & South-South: ₦905 and South-East: ₦905.

In its announcement, Dangote Refinery encouraged consumers to purchase fuel only from authorised partner stations and urged the public to report any cases of non-compliance via its official hotlines: +234 707 470 2099 and +234 707 470 2100.

“Our quality petrol and diesel are refined for better engine performance and are environmentally friendly,” the company said.

Business

Naira Appreciates Against Dollar At Foreign Exchange Market

Published

4 weeks ago

May 17, 2025

Editor

The Naira ended the trading week on a positive note, recording a bullish close on Friday at the official foreign exchange market.

It appreciated N1,598.72 against the U.S. Dollar, reflecting a modest gain that suggests continued efforts to stabilise the local currency.

According to figures published on the Central Bank of Nigeria’s official website, the Naira strengthened by N0.60k against the Dollar on Friday.

This upward movement represents a 0.03 per cent appreciation compared to the N1,599.32 exchange rate recorded at the close of trading on Thursday.

The local currency had shown some resilience earlier in the week, posting gains on both Tuesday and Wednesday trading sessions.

On Tuesday, the Naira appreciated by 0.02 per cent, followed by a stronger gain of 0.21 per cent on Wednesday.

These improvements were seen as positive indicators of growing investor confidence and increased supply in the foreign exchange market.

However, Thursday’s trading session saw a minor setback, with the Naira slipping by N2.62 against the Dollar.

This loss equated to a 0.16 per cent depreciation, dampening the midweek rally seen in previous sessions.

Market analysts attributed Thursday’s dip to a brief increase in Dollar demand from importers and other market participants.

Despite this, the week still closed on a positive note, with the Naira showing signs of gradual recovery and increased market stability.

Analysts continue to monitor the Central Bank’s policies, especially interventions aimed at improving Dollar liquidity and managing demand pressures.

The Naira’s performance in the coming weeks will likely depend on consistent supply inflows and investor sentiment across the broader economic landscape.