Dealers Dump Dollar As Naira Rebounds

Naira recorded a 15 per cent gain against the dollar in the parallel market within a week, trading around N820/$ in Lagos and Abuja yesterday evening.

Reports say that traders at major market clusters were hurriedly dumping dollars yesterday as fear of a further slide in the value of the dollar gripped the market.

Addressing newsmen, A trader hinted that he was desperate and looking for an opportunity to offload his hoardings as the naira could appreciate to around N700/$ this weekend. He also added that the naira has sustained the rising momentum seen since the beginning of the week.

Another dealer said, “As we speak, there is no fixed rate. People sell at the slightest opportunity as they are not sure what the rate would be tomorrow. And the speed at which the hard currencies are falling against naira is too high. This is the cause of panic, and it is real.”

He also revealed that he was still hoarding a substantial part of what he bought at an average of N920/$ last week.

Adamu Alhassan, who is a bureau du change operator, said: “I am not happy about what has been happening since morning because most of us have lost some money. The rate was N950 just last week. But now, we are buying at N820 and selling at N850. We are not sure what to expect next.”

Samuel Itodo, who came to buy dollars, told newsmen that he was very “happy with what is happening with the dollar. Who will believe that the rate can crash to the level within days? I was apprehensive about the effect the falling exchange rate will have on the cost of living.”

Itodo also added that “As an import-dependent country, any rise in the dollar will automatically mean higher prices and higher cost of living. But can this be sustained on a longer term?” 

What you need to know about the naira rebound

Recall that about 48 hours after President Bola Tinubu and Acting Governor of the Central Bank of Nigeria (CBN), Folashodun Shonubi, held a crucial meeting on the state of the foreign exchange (FX) market, newsmen reported that there was a breather for the troubled currency as it recorded a moderate gain, trading at about N880/$ at the black-market mid-week.

Despite the panic selling, newsmen gathered that trading volume is still very low, underpinning the level of illiquidity.