Nigeria’s local currency, the Naira, depreciated to N410 to the US dollar on the Parallel market on Friday in the face of looming uncertainties in the foreign exchange market.
This comes as a consequence of the suspension of FX sales to Bureau De Change (BDC) operators by the Central Bank of Nigeria (CBN).
The Naira depreciated by N20 moving up from N390 traded on Wednesday to N410 by Friday evening.
Analysts say the dramatic change in price is due to the volatility in the FX market as the Naira had sold for N395 on Friday afternoon.
The drop in foreign exchange earnings due to the raging effects of the COVID-19 virus as well as the falling prices of crude oil on the international market has put enormous pressure on Nigeria’s foreign reserves which in turn has a negative effect on the value of the Naira.
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The CBN had suspended sales of FX after it received a letter from BDC operators asking the apex bank to declare a market holiday due to the closure of Nigeria’s borders to contain the spread of the COVID-19 virus.
The BDCs argued that closure of the borders meant less travellers and less demand for foreign exchange.
Consequently, the Naira depreciated at the Investors and Exporters Forex window on Thursday by 1.39% closing at N385.53kobo to the US dollar.
On the official market, the Naira fell to N361 to the dollar.