This Nigeria
The Association of Bureaux De Change Operators of Nigeria (ABCON) says the widening gap between the official and parallel market exchange rates was being driven by acute dollar scarcity.
The body said this was due to the continued suspension of foreign exchange sales to BDCs by the Central Bank of Nigeria (CBN).
ABCON stated this in its Quarterly Economy Review for the first quarter of the year 2022 expressing concern over the inability of the fiscal and monetary authorities to address the wide gap between the parallel market and multiple exchange rates in the country.
The review showed that the gap between the official and parallel market exchange rates (premium) widened to N171.83 per dollar at the end of the first quarter (Q1’22) from N106.33 per dollar on Wednesday, July 28, barely a day before the apex bank suspended dollar sales to BDCs.
“A premium is the outcome of market restrictions that drive the non-official supply and demand for foreign currency, a symptom of inconsistency in fiscal and monetary policies.
“It also showed lack of credibility of exchange rate policy, given the level of foreign reserves.
“That fiscal and monetary policy in Nigeria cannot curtail the premium that rent-seeking dealers in foreign exchange were pursuing, and it is worrisome and contributes highly to the distortions in the economy.
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