Exchange rates worsened across the foreign exchange (FX) market as Nigerians shift attention to scarcity of the naira across the country. At the investors and Exporters, the naira slide to N462 per United States dollar, losing about 0.1% from N461.50 on Wednesday.
For market participants, rate movement has added to losses incurred by manufacturers and importers in the fast-moving consumer goods sector, according to audited statements released to the Nigerian Exchange. It’s a double whammy of exacerbated demand-supply pressures driven by foreign currency scarcity in the Nigerian economy ahead of 2023 elections.
Foreign investors continue to stay sidelined amidst uncertainties in the local economy. Market analysts project that hot monies remain scarce following Moody’s sovereign downgrade on Nigeria’s ratings.
In the local economy, the naira is not readily available to Nigerians, fuel is scarce as prices surged more than 100% while electorates are seeing queues for their voters’ cards.
At the investors and exporters window, the naira was sold at N461.50 on Wednesday. The level of demand has been relatively steady though until Thursday, partly as a result of a lack of local currency for transactions.
In the parallel market, the exchange rate has also remained unchanged from the previous week’s close, selling at #755 from N748. FX traders told MarketForces Africa that demand has been affected by inadequate supply and restrictions on the naira by the apex bank.
After a 10 extension that was granted by the Central Bank of Nigeria (CBN) to swap the old naira, depositors have continued to grapple with scarcity of new naira notes. Today, a large number of Nigerian banks have stopped loading their automated teller machines to dispense to customers.
This has raised pressures on transactions while unorganised currency traders increase charges to 10% of the amount requested via point-on-sales service machines, a trade pattern which has spread across. Unfortunately, the exchange rate in the black market has failed to improve amidst a decline in the volume of naira notes in circulation.