The U.S. dollar sold for N450 at the parallel market last Friday, having depreciated by 4.6% or N20 compared to the value at which it closed in the previous session.
The volatility of crude oil prices has triggered a liquidity crisis in the foreign exchange market given that as much as 90% of Nigeria’s forex earnings comes from oil.
Currently, the demand for dollar is pretty much higher than its supply as importers and speculators scramble for the little that is in circulation, thereby putting more strain on the value of the Naira.
“The crash of naira rate in the parallel market to a high of N450 per dollar yesterday (Friday) is a result of the shallowness and dryness of the market.
“It is our resolve to enhance liquidity in the foreign exchange market and help discover a true market exchange rate that is devoid of speculative and hoarding activities,” said Aminu Gwadabe, President, Association of Bureau De Change Operators of Nigeria (ABCON).
He recommended that demand and supply measures be taken to deal with the challenges ahead.
The central bank had halted the sales of dollars to Bureaux De Change operators after ABCON demanded that the apex bank grant the association a market holiday in the wake of the coronavirus outbreak.
“ABCON in preparedness to our return to business has digitised the ticketing systems of our members in various collections centre nationwide in anticipation of the lifting of restrictions on internal movements next week.
“First our return to trading will eliminate the volatility in the market and ensure stability in the market in the face of daunting challenges of COVID-19 and tumbling oil prices,” Mr Gwadabe said.
According to him, ABCON’s exit plans include online real-time ticketing numbers for BDCs on every bidding day, compulsory use of face mask in our awaiting area, provision of handwashing facilities in all our awaiting area and the use of infrared thermometers and hand sanitisers in all our waiting areas.
Others are observation of social distancing in waiting areas, maximum of 20 persons per time slots at the disbursement centres and the use of personal protection equipment by frontline staff.
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