A few months into the administration of President Bola Ahmed Tinubu, the Nigerian naira has been experiencing a continuous downward spiral, causing concern among citizens and economic experts alike.
On Wednesday, July 19, 2023, the naira took another hit, falling to ₦860 per dollar at the parallel market. This figure represents a significant 4.2 per cent depreciation compared to the ₦825 it traded at the previous day.
The widening gap between the official and parallel market exchange rates is becoming more apparent as the naira struggles to maintain stability. The currency has been subject to fluctuations since the government implemented the unification of exchange rate windows.
In contrast, at the investors and exporters (I&E) window, there was a momentary relief as the naira appreciated by 6.58 per cent against the dollar, closing at ₦742.9 on the previous day, Tuesday, July 08, 2023.
Local Bureaux De Change (BDC) operators in Lagos and Ogun states have been facing immense pressure due to the high demand for foreign currency in the parallel market. Consequently, the BDC operators set the buying price of the dollar at ₦840 and the selling price at ₦860, leaving a profit margin of ₦20.
Abubakar, a BDC operator in the Agbara area of Ogun state, attributed the decline of the naira against the dollar to an increased demand for dollars amid a supply shortage in the market. He confidently stated, "Dollar is scarce now in the market. How much do you need? I can find it for you."