Naira drops to 251/dollar, external reserves now $29.7bn

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The naira crashed further against the dollar from 247 last Thursday to 251 on Saturday at the parallel market.

This came barely one week after the Central Bank of Nigeria cut foreign exchange supply to Bureau De Change operators.

The central bank had during its weekly forex sale to the BDCs last Wednesday refused to sell forex to operators that failed to render returns on the utilisation of previous forex bought at the official window.

The dollar was selling for between N241 and N243 before Wednesday’s decision. The local currency was still selling for 197 against the dollar at the official market.

Meanwhile, the nation’s foreign currency reserves dropped to $29.7bn on December 3, 2015, data from the CBN’s website showed on Sunday.

This is expected to put more pressure on the CBN’s bid to defend the naira and avoid a devaluation of the local currency.

The gross foreign exchange reserves had dropped to $29.92bn on November 30, the first time they fell below $30bn since July 13.

The reserves have fallen by 20 per cent since the end of June 2014, when Brent crude prices began a more than 60 per cent plunge, hammering the finances of Africa’s largest economy and biggest oil producer.

The naira has been fixed at 197-199 per dollar since early March after the CBN Governor, Mr. Godwin Emefiele, restricted banks’ access to foreign exchange.

Source: Punch