Vanguard investigations revealed that the parallel market exchange rate rose yesterday from N460 per dollar on Wednesday to close at N466 per dollar. Hence the naira depreciated by N11 against the dollar this week, up from N455 per dollar at the close of business last week.
BDC sources told Vanguard that the persistent depreciation of the naira ths week was due to a host of factors chief of which was the supply of dollars from Travelex, which has been limited to BDCs in Lagos. Also, the weekly dollar sale of $15,000 by Travelex to each BDC was delayed yesterday aggravating the naira depreciation.
Confirming this development to Vanguard, Chief Executive Officer, H.J Trust BDC said, "The dollar went up today (yesterday) because Travelex is yet to sell to BDCs. But we believe they would do so before the end of today. If that happens, the exchange rate will drop by tomorrow morning (today).
Meanwhile, Vanguard gathered that the CBN on Wednesday met with Travelex and Association of Bureaux De Change Operators of Nigeria (ABCON), to evolve measures to enhance supply of dollars and halt the depreciation of the naira.
Confirming this development to Vanguard, ABCON President, Alhaji Aminu Gwadabe said, "Yes we met with the CBN and Travelex to identify the problem and proffer solutions.
Much of the problem is because BDCs outside Lagos are yet to be incorporated into the weekly dollar sale by Travelex. As a result there is increased demand pressure on the market in Lagos, causing the rate to go up. Also remember that we are in the ember months, and preparation for the yuletide season is increasing demand for dollars.
To address this, the CBN has directed that First Bank should begin to sell to BDCs outside Lagos.
It also directed Travelex to open up more locations across the country to serve BDCs outside Lagos. Also the number of BDCs accessing the weekly dollar sale in Lagos has been increased from 1000 to 1,400. So the situation in the market now is temporary. We expect the rates to drop as soon as these measures are implemented".
Analysts at the Financial Derivatives Company (FDC) however differed, insisting that pressure on the naira will persist in the parallel market. In the Company's Bi Monthly Business and Economic Update issued on Wednesday, they stated, "Travelex sale to BDCs had a temporary relieve on the parallel market but has been insufficient to meet the huge demand gap.
Travelex supply in the market is conditioned strictly to that travelling outside the country. Hence, it does little to compensate for other segments of the economy that desire forex for other purposes. Hence pressure on the naira is to persist in the market".
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