By Collins Nweze
The naira on Thursday depreciated to N478 to dollar at the parallel market as importers and manufacturers push unmet foreign exchange (forex) demand from official market into the parallel market.
The naira was last week exchanging at N470 to dollar, losing N8 in the last four days.
Data from the Central Bank of Nigeria (CBN) showed that spot rate or official exchange rate have remained stable at N379/$1.
Murega Mungai, Trading Desk Manager, AZA, a global forex trading platform, told foreign investors that naira was further weakened by uptick in consumer price index (inflation) from 13.7 per cent in September to 14.2 per cent in October, data from the National Bureau of Statistics (NBS) showed.
In a report titled: “Rising food prices add pressure for Naira”, he explained that the rise in inflation was caused by increase in food prices triggered by border closures, dollar restrictions, and robberies preventing farmers from producing food and supplying them to major cities.
“As economic indicators point to inevitable recession and increased default risk, we foresee downward pressure on naira extending towards the N480 to dollar level,” he said in emailed note to investors.
There are nearly $2.5 billion forex demand backlogs at the official market, with many manufacturers unable to bear unusual delay in forex access moving into the parallel market to source for dollars.
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