SEE How Hajj Pilgrims Made Naira’s Exchange Rate Fall Considerably

Increased dollar demand to fund Hajj depreciates naira against the dollar again.

Hajj pilgrims hit naira’s exchange rate
File photo

Increased dollar demand to fund Hajj depreciates naira against the dollar by N5 to N220 per dollar.

The naira depreciated yesterday from an average of N215 per dollar on Friday to N220 yesterday at the parallel market.

READ ALSO: 5 Reasons Why Naira Rate Will Begin To Fall

“The demand is very high and the buyers willing to pick dollars at any available price,” told the head of Association of Bureaux De Change Operators of Nigeria, Alhaji Aminu Gwadabe adding that “also the demand of dollars by importers is increasing at an alarming rate.”

However, experts say that the huge demand for dollar from those going for the Hajj pilgrimage contributed to the recent naira’s fall considerably.

READ ALSO: Naira Holds Its Position Against Dollar

66,000 pilgrims were approved for the Hajj. The Central Bank of Nigeria approved maximum sale of $1000 at N160 per dollar to each pilgrim. Considering the fact that to fund the pilgrimage at least $6,000 required to each pilgrim, the demand for additional $330 million emerged at the foreign exchange market.

The demand in foreign currency increased considerably due to the need for many Nigerians to pay the tuition fees abroad.  In its hope to keep naira afloat CBN imoposed restriction on dollar deposit and withdrawal from domiciliary accounts, has made many Nigerian parents whose children study abroad, to seek foreign currency such as pounds and dollars at the parallel market.

Falling prices of oil, Nigeria’s main export,have heavily hit naira’s stability which in turn caused a sell-off in assets by foreign investors.

In February Nigeria’s central bank had to impose tight measures of control on the foreign exchange market to save Nigeria’s dwindling foreign reserves.

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