Naira drops to N324 on parallel market

Naira drops to N324 on parallel market

The naira yesterday fell to N324 on the parallel market after Emmanuel Ibe Kachukwu, raised petrol prices by 67 per cent.

“People are holding on to their dollars in anticipation of an increase in demand for dollars by oil importers,” President, Association of Bureau De Change Operators of Nigeria (ABCON) Aminu Gwadabe, said.

However, the naira exchanged at 199.40 to the dollar on the official interbank market, around the 197 official fix rates. “There is dollar scarcity right now in the market, even at 324 naira you can’t find dollar to buy,” one trader told said. Traders said expected pressure from fuel importers could further push down the naira value in the coming days.

Analysts at FBNQuest said the Petroleum Product Pricing Regulatory Agency’s (PPPRA) product pricing template assumes that all transactions for imports are carried out at the official forex rate, which is problematic.

They explained that since around 50 per cent of national petrol consumption was previously met by the private sector, the inability of this group, mainly independent marketers, to source forex at the official rate led to an unprofitable venture for many marketers.

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