The acute scarcity of foreign exchange, especially the United States dollar, made the naira to fall further on Tuesday to 352 against the greenback at the parallel market.
The increasing pressure on the naira is caused by high demand for the dollar by importers and speculators, foreign exchange dealers said.
The local currency had weakened to 345 at the parallel market on Monday, having hit 338 last Friday as importers scrambled for the dollar to meet overseas obligations
The central bank has left its official rate unchanged at N197 to the dollar on its interbank window.
“Most individuals who sell (dollars) to us are no longer willing, but demand is piling up,” the acting President, Association of Bureau De Change Operators, Aminu Gwadabe, told Reuters on Tuesday.
Last month, the Central Bank of Nigeria banned dollar sales to BDC operators, sending the naira to record lows at the black market, and later stopped daily sales to the interbank market, in an effort to conserve the external reserves, now at their lowest in more than 11 years.
The nation earns around 90 per cent of its foreign exchange earnings from crude oil exports. The foreign exchange reserves fell to $27.83bn as of February 12, data from the CBN website showed.
Some retail currency operators have few dollars in their vaults and depend on other members to fill orders when they have excess demand, fuelling the weakness in the currency, Reuters reported quoting forex traders.
The naira has depreciated by over 13 per cent in less than two weeks.
The currency hit a then record low of 338 against the greenback on Friday, a day after the Bankers’ Committee announced that it might stop providing foreign exchange for school fees and medical bills payment.
The naira, which has been on a free fall in the past few weeks, depreciated steadily from 310 last week Monday to 335 on Thursday at the parallel market.
“The current naira-dollar exchange rate is artificial; it is as a result of the negative perception about the naira and the fear that it may be devalued,” Gwadabe said.
President Muhammadu Buhari is concerned that further depreciation will hurt poor Nigerians, but the CBN’s refusal to revise the pegged exchange rate has widened a chasm between official rate and the parallel market.
The Chief Executive Officer, Economic Associates, Dr. Ayo Teriba, said there were several ways the Federal Government could attract forex into the country to stabilise the naira, stressing that the currency needed not be allowed to depreciate to the current level.
Teriba said, “Saudi Arabia has started attracting foreign investments. The country opened an Initial Public Offer that banks were falling on one another to buy. Nigeria seems not to be doing something. I don’t think that Nigeria needs to allow the naira to be this weak; we are not helpless, we can do something.
“This is 2016 and not 1986, 1992 or 1995; the conditions are not the same. The global environment has liquidity now that Nigeria can attract. The situation is not like 1986 when the global environment was tight.
“Nigeria has investment opportunities; we have the largest population in Africa, we are the biggest oil exporter in Africa. I have told you that I don’t think that we need to borrow to build infrastructure. We can open critical sectors like rail and power, among others, and you will see the huge forex that will come into the country.”