Dollar scarcity persists as financial market remains closed

Scarcity of the United States dollar has persisted in the country especially as activities in Nigeria’s financial market remained shut due to a two day public holiday declared by the federal government for Eid-el-Kabir celebrations .

Nigerian Tribune findings revealed that with the resumption of a new academic session in most schools abroad, a lot of parents that have been finding it extremely difficult to purchase dollars from the interbank forex market, are spending even more as they are left with the option of purchasing the greenback from the parallel market at N424 and N425 to the dollar between Friday and Monday.

Normal banking activities as well as transactions at the interbank foreign exchange (forex) market will resume on Wednesday, 14th September,2016.

Analysts are concerned that the inability of parents, whose children school abroad, to access foreign exchange  is threatening the completion of their wards’ education.

The situation is worsened by the recent directive given by Nigeria’s central bank to commercial lenders requiring them to allocate 60 percent of their foreign exchange purchases to manufacturers, in a bid to boost their ability to pay for imports and boost the economy.

Widespread dollar shortages, caused by a fall in oil revenues, have hit manufacturers’ ability to import raw materials and spare parts, forcing many plants to close.

Yet, currency dealers insist that even the apex bank does not have enough dollars to play in the market, not to talk of banks which also have been mandated to sell dollars to Bureau De Change (BDC) operators.

Although the Central Bank of Nigeria’s Governor, Mr. Godwin Emefiele, recently revealed that the apex bank spent about $2 billion annually on foreign school fees remittances, the new forex regime appears incapable of meeting such a huge demand any more.

Available recpords reveal that average weekly dollar turnover on the interbank forex market (spot) has dropped to $600 million presently compared with the $2 billion available as at August last year.

The development was further validated by banks’ returns on forex utilisation for the week ended September 2, 2016, which was published last week.