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Why Naira Fell to N230 to $1 at Black Market

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The Naira on Thursday declined N230 to a dollar from N228 recorded on Wednessday as importers sought alternative sources for dollars after the Central Bank of Nigeria (CBN) stopped foreign-currency funding for some imports. This was said by Aminu Gwadabe, president of the Association of Bureaus de Change of Nigeria in a chat with our correspondent last week.

Gwadabe says the currency traded at N215 per dollar last week before the new restrictions, were rollrd out by the apex bank.

At the interbank trading, the naira advanced 0.1 percent to N198.85 naira per dollar, adding the nation’s foreign-currency reserves have declined 16 percent this year to $29 billion.

The CBN last week listed 41 items, including rice, private jets, foreign securities and Indian incense, which couldn’t be funded in the interbank foreign-currency market or by the use of export proceeds in its bid to conserve external reserves and stabilize the exchange rate.

Gwadabe said the restricted items account for as much as $6 billion of goods imported every quarter.  “The ban is putting pressure on naira on the streets,” he said.

According to him, faced with a 45 percent plunge since last year’s peak in the price of oil, the source of two-thirds of government revenue, the central bank began imposing currency restrictions as pressure mounted on the naira. The Nigerian currency has weakened 18 percent against the dollar in the past year.

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