Naira rose to N361 to the dollar on Tuesday in the parallel market compared to the N357 price achieved on Monday. The naira has been depreciating in recent weeks as the CBN continues to leave Nigerians in the dark about what its planned forex policy will look like.
According to an article on Reuters, the rise in the price of the dollar is mainly attributed to “customers trying to hedge against a likely currency depreciation when the central bank clarifies it new forex policy. The speculators have basically snapped up every available dollar from retail outlets, the article confirms,
“Dollar demand has increased due to uncertainty around central bank’s FX policy,” said Aminu Gwadabe, head of Nigeria’s bureaux de change association. Most firms and individuals that normally sell dollars to retail currency dealers are holding on to cash, Gwadabe.
Back in March when the Naira witnessed a similar consistent drop in price, the Naira depreciated to as low as N405 before beginning a massive reversal that brought it down to as low as N310 to the dollar. Analysts expect the CBN to reveal details of its new policy sometime this week.