Naira depreciates further to N614/$ at parallel market

The Nigerian naira has fallen to N614 per dollar in the parallel section of the foreign exchange market. 
The figure represents a depreciation of N7, or 1.2 percent, compared to the N607 it traded for in the previous two weeks. 

Bureaux De Change operators (BDCs), also known as ‘abokis,’ said on Tuesday that they buy the greenback at N608/$, profit by N6, and then sell at N614. 

On the official market, the naira fell 0.21 percent to N421/$ on Monday, according to data from FMDQ OTC Securities Exchange, a platform that oversees official foreign-exchange trading. 

Nigeria has several exchange rate windows, including the importers and exporters window (I&E), where currency is traded between exporters, investors, and purchasers of currency, the SMEIS window, where currency is sold to importers, and others. 

International organizations such as the World Bank and the International Monetary Fund (IMF) have repeatedly advised Nigeria’s Central Bank (CBN) to harmonize the official and parallel market exchange rates. 

However, CBN Governor Godwin Emefiele has stated that, despite IMF and World Bank advice, developing economies such as Nigeria have the freedom to adopt “homegrown solutions” to their economic problems. 

He claims that the managed floating exchange rate, which allows the CBN to intervene in the market in the event of a supply shock, would be in place as long as supply exceeds demand. “They want us to free the exchange rate. And you do know that this has some impacts on the exchange rate itself,” he had said. “When you allow that to happen, you will have an uncontrollable spiral on the naira. “But what managed float means is that we have some measures in place to help control the spiral.”