Naira dropped hard against the dollar on Monday, hitting 1,030 bucks in the informal market. It’s a big slide from last week’s progress. That’s like an N80 drop or an 8.42 percent fall from the N950 it was at last Friday.
This is a big deal because it’s the first time naira’s going down since the Central Bank of Nigeria started clearing up some of its FX backlog last week. People who swap currency, the Bureaux De Change guys, say naira’s bouncing between N990 and N1,030 per dollar.
One guy, Awolu, said, “You can sell a dollar for N995. If you’re buying from me, it’s N1,020.” Another, Kadri, added, “If you’re selling, it’s N960. If you’re buying, it’s N990.”
Aminu Gwadabe, the Bureaux De Change Operators boss, thinks the dollar got stronger ’cause folks who got it at a higher price don’t want it to lose value after what the Central Bank of Nigeria did last week.
Last week, the central bank started paying off old FX deals owed to different banks, trying to pump up the foreign exchange market after naira’s been sliding for a while. The Finance Minister, Wale Edun, said these old deals were worth about $6.7 billion.
This move made naira jump up by about N220 after last week’s close at N950 per dollar in the informal market. But now, it looks like that good run is over. Gwadabe told The PUNCH that by afternoon, the dollar was going for N1,015 to N1,020.
He says speculators are watching closely to see if these fixes will stick. If they think it’s not gonna keep going, they’ll react. And there are folks who bought at a higher rate and don’t want to lose out more.
Plus, the naira took a 3.6 percent hit in the official market, ending at N809.02 for a dollar on Monday, down from N780.23 per dollar on Friday, according to the info from FMDQ OTC Securities Exchange.