Naira depreciates at interbank, parallel markets

The Nigerian Naira dropped N10 to trade at N465/$1 on Wednesday, November 16, as against the N455/$1 it was on Tuesday at the unofficial (black) market.

The local currency however stayed firm against the Pound Sterling and Euro to trade at N560 and N495 respectively, at the same unofficial market.

The local currency at the interbank market fell to N316.52 on Wednesday as against N315.25 to the dollar which it settled at on Tuesday.

The huge depreciation at the un-official market comes after operatives of the Department of State Service (DSS) and Economic and Financial Crimes Commission (EFCC) raided street traders and some offices of Bureau de change (BDC) operators last week.

It was gathered that the DSS raided currency dealers in some parts of Lagos and Abuja, arresting operators that sell above the exchange rate stipulated by the Central Bank of Nigeria (CBN).

The clampdown followed a meeting between the Central Bank of Nigeria (CBN), the SSS and leadership of the BDC association aimed at finding solutions to the poor performance of the national currency against other international currencies, particularly the dollar in the money market.

But according to the local currency traders, the move by DSS has instilled fear among street traders and some BDCs.

Experts have also predicted that the raid will lead to increased volatility of exchange rate and further fragmentation of the parallel market, a prediction that seems to be occurring.