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Naira Falls to N470 /1$, Weakest Level in Six Weeks

There were indications on Friday that the naira had fallen to its weakest level in six weeks in informal trading as Central Bank of Nigeria (CBN) interventions in the official window failed to meet demand.

At the parallel market on Friday, the naira changed hands for N470 per dollar, the lowest since September 29, according to abokifx.com, a website that collates street rates in Lagos. The naira closed at 382.10 per dollar on the spot market, where the central bank sells limited amounts of the greenback bank to importers.

The naira had traded for N468 and N466 against one dollar at the parallel market on Thursday and Wednesday respectively, while it sold for N465 and 464 per one dollar at the Lagos bureau de change on Friday and Thursday respectively.

Agency report stated that the naira had lost all ground it gained after the regulator started weekly interventions, signaling the continuous existence of pent-up demand for the dollar.

The CBN resumed sales to licensed bureau de change operators in September after the federal government opened up international travel following the lifting of COVID-19restrictions.

The money available in the official window is insufficient to meet demand, Julius Tayo-Olufemi, chief executive officer of Cephas Grace International Ltd., which imports home appliances, said by phone.

“On a monthly basis, I need about $100,000 to $150,000 and the maximum I can get at the controlled price is $20,000. So I have to sort out the remaining balance myself,” Tayo-Olufemi said.

Yearly Christmas season import bill pressure, which usually starts late November and disappears in January, may be coming early, according to Omotola Abimbola, an analyst at Chapel Hill Denham.

The regulator has always increased intervention sales to money changers, but “they are a bit hampered this time around,” he said.