Read What Happened To The Naira On Wednesday

Reports from the parallel market has revealed that the Naira continued to depreciated against the dollar on Wednesday, October 7, despite the sale of foreign currency to operators of Bureau de Change (BDC).

The Nigerian naira depreciated from N224 to N225 against the US dollar in the parallel market on Wednesday, October 7.

According to Premium Times, the naira lost N1.00 to the dollar on Wednesday afternoon, as it traded N225 to the dollar as against N224 on Tuesday, October 6.

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However, the official interbank rate maintained its value at N197 to the dollar.

A rebound of the naira was expected by traders of the parallel market, especially after the sales of foreign currency to the BDC by the Central Bank of Nigeria (CBN).

It is recalled that 2-months-ago, the naira hit a record low of 241 against the dollar at the parallel market, Reuters reported.

Sources note that the ban on importers from accessing the Nigerian foreign exchange markets for the importation of 41 items had led to the volatility of the naira-dollar exchange rate at the black market.

Foreign exchange dealers say the artificial scarcity of the United States currency still pervades the market.

Financial experts have inferred that the CBN needs to devalue the naira to allow the local currency achieve an equilibrium price against the dollar.

The evaluation of ratings agency, Standard & Poor’s said Nigeria will inevitably have to devaluate its currency, most possibly by more than 15%, but the CBN officials have said that they are not intending to devalue naira to keep its rate in accordance with its real value as reflected by the parallel market.

This stand by the CBN raised concerns among investors who fear that with such policies, Nigeria is likely to lose its membership in the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) due to official policies.

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