The Nigerian naira faces fresh pressure on the parallel market with dollar supply coming short of demand by persons seeking currency to pay school fees abroad as the central bank continue to ratio forex for businesses.
The local currency was quoted at 510 naira per dollar on the black market on Thursday, weaker than last week’s 500 to the dollar.
Demand for dollars has soared even though Nigeria’s forex reserves have reached their highest in more than 12 months. The naira continues to trade flat on the official interbank window at 305.5 to the dollar.
Traders said demand pressure is mounting at the black market but dollar supply has not significantly improved, suggesting further depreciation of the local currency may be coming.
The pressure in the market is not expected to lift anytime soon because the supply to the market is being squeezed.
BDC operators, sources say prefer to sell in secret to their known clients rather to street traders.
Also the fact that there has been a lull in the number of Diaspora Nigerians coming home has also led to a sharp reduction in supply to the black market.
Sources in the hospitality industry disclosed that that the number of Nigerians that returned home during the festive period was lower than the usual trend.
Diaspora Nigerians usually are one of the biggest sources of supply to the market and now that they are not coming home, the supply in the market is drying up.