Naira crashes to N398/$ at parallel market

THE Nigerian naira on Wednesday crashed at the parallel market to N398 per dollar despite Central Bank of Nigeria’s regular interventions at the foreign exchange (forex) market. Though currency dealers attributed the development to high demand for dollars, the apex bank insists that commercial banks are deliberately hoarding the greenback and warns the lenders against such practices.

This is coming at a time when the International Monetary Fund’s (IMF’s) country head Gene Leon, said the local currency is over-valued by around 10 to 20 percent.

“We do find there to be some over-valuation at this point of the naira, of the official currency, somewhere to the tune of 10 to 20 per cent,” Reuters quoted Gene Leon, IMF mission chief for Nigeria, as having said in a telephone media briefing.

The IMF had urged Nigeria to introduce immediate changes to its exchange rate policy – characterized by central bank curbs, multiple exchange rates and an artificially high naira valuation.

Meanwhile, currency traders said the local currency dropped eight points to exchange at N398 per Dollar as against N390 it went for a greenback on Tuesday, April 4. The local currency also weakened against the Pound Sterling to trade at N485 as against the previous rate of N480, but maintained rate at N415 to the Euro at parallel market.

At the official market, the currency gained 0.02 per cent to close at N306.25 to the dollar

Alhaji Aminu Gwadabe, Acting President of the Association of Bureau De Change Operators of Nigeria (ABCON) in a telephone conversation on Wednesday, told Nigerian Tribune that CBN will inject additional $10,000 proceeds of International Money Transfer Service Operators (IMTSO) to 3,135 Bureau De Changes today to checkmate the activities of hoarders and speculators.

While commending CBN for its doggedness in the currency war, Gwadabe said providing liquidity into the BDCs subsector “is the rat poison that will smoke the rat out of the hole in terms of speculation and hoarding. The action will justify CBN’s determination to continue to strengthen naira and get it out of the grips of speculators and hoarders.”