By Chuks Emele
Nigeria’s naira currency weakened against the dollar in the parallel market amid mounting political risk, despite central bank moves toward a single exchange-rate rate.
The naira exchanged for between 499 and 500 naira per dollar in the parallel market on Thursday for people buying dollars, while those selling were paid from 494 naira and 495 naira.
It was part of a trend of decline that has quickened since the Central Bank of Nigeria scrapped its official rate last week and adopted the interbank rate at which importers and exporters traded, in compliance with the terms of a 1.5 billion-dollar World Bank loan.
The interbank rate adopted by the central bank closed at 410.90 per dollar on Thursday. The parallel, or street market rate, is used mostly by people who want to avoid the bureaucracy and paperwork associated with official sources of foreign currency.
The naira has remained under pressure as many citizens stockpile hard currencies to beat soaring inflation and a steady devaluation since the coronavirus pandemic.
Nigeria depends on oil and gas exports for most of government revenue and almost all foreign earnings. The economy has suffered the impact of low oil demand as economies shuttered worldwide due to Covid-19.
Amid the country’s economic woes there is spiraling violence across all regions in addition to the Islamist insurgency in the northeast now in its 11th year. A fresh conflict is now unfolding in the southeast, where armed separatists are increasingly active, attacking police stations and clashing with troops.