The naira hit a record low of N436 to the dollar on the parallel market on Thursday and was quoted at N313.07 to the dollar at the official interbank market, down from N305 a dollar, where it had settled in the last one week.
Similarly, Nigeria’s foreign exchange reserves were down to $24.83 billion by September 19, its lowest level in more than three years, prompting division among traders some of who said there had been no significant policy response to the fall in the reserves, further fuelling concerns.
Others foresee the naira on the path of recovery by Monday due to the introduction of Travelex, a licensed Forex dealer in the market, even as importers are being forced to resort to unofficial market.
The President of Association of Bureau De Change Operators of Nigeria (ABCON), Alhaji Aminu Gwadabe, said on Thursday in Lagos that a licensed Forex dealer would enhance transparency in the distribution network.
Travelex, an international money transfer organization, was officially directed by the Central Bank of Nigeria to distribute Forex to Bureaux De Change operators by Monday.
Gwadabe said that a licensed Forex dealer would enhance transparency in the distribution network.
He said that Forex distribution would be efficient and uniformed across ABCON members unlike what was obtainable in the past.
According to him, Travelex has the technology to sell Forex to about a 1,000 BDCs within a couple of hours, which is a major advantage.
He said, “Against this background, the naira is expected to be on a recovery path from Monday as the distribution of Forex to BDCs will boost liquidity in the market.
“The boosting of liquidity in the market will dampen the fears of investors and market speculators, thereby raising their confidence in the market.
“This is a purely ABCON and Travelex arrangement, and has the capacity of removing the bottlenecks in the Forex distribution chain. Travelex has the technology to pay about 1,000 BDCs within two hours. The new arrangement also eliminates relating with bank account officers.”
On the CBN’s retention of the Monetary Policy Ratio at 14 per cent, Gwadabe said, “I agree totally with the decision of the apex bank to retain the rate.”
He said that the more naira at the disposal of Nigerians, the more they want to convert it to dollars for speculation purposes.
The coming of Travelex into the Forex distribution chain was a response to easing liquidity challenges in the market.
Since the resumption of sale of Forex to BDCs, ABCON had complained of poor distribution of Forex to its members which led the association to plead for an independent body to take over the distribution.
Stakeholders in the Forex market believed that the latest development would see the naira mounting the wheel of recovery.