TheCable

The naira  took a downward turn on Tuesday as the demand for the dollar rose.

The Nigerian currency was quoted at 224 to a dollar on the parallel market, 0.89 percent weaker than its 222 rate on Monday.

Harrison Owoh, a Nigerian Bureaux De Change (BDC) agent told Reuters that the demand for the naira has been on the increase since August 7.

“We’ve seen a surge in dollar demand since Friday,” he said, while adding that the Central Bank of Nigeria (CBN) may sell dollars this week.

Owoh said the bank sold around $160 million to BDCs last week to increase dollar supply.

On the official interbank market, the naira ended at 197, a level it has been stuck at following a Central Bank’s devaluation and consequent peg on the exchange rate in February.

The surging demand of the dollar has been blamed on importers and activities of individuals travelling abroad for summer holidays.

BDCs are allowed to sell up to $4,000 as personal travelling allowance and $5,000 as business travelling allowance, but some persons buy above the stipulated dollar limit from the undocumented parallel market.

Just eight days ago, the naira closed at N209 to $1, as banks continued to reject dollar deposits in customers’ domiciliary accounts, before such accounts were finally banned.

Godwin Emefiele, the governor of the nation’s apex bank, is to appear before the senate on Wednesday to further address the issues responsible for the fall of the local currency.