The United States dollar hit N735 in the parallel market on Wednesday as political campaign activities began in the country.
Africa Housing News reported that the USD traded for N720 earlier this week but according to Bureau De Change operators in Lagos and Abuja, dollar price had increased and now trades between N728-N735.
A BDC operator at Amuwo-Odofin in Lagos, Bala Usman, said, “It is N728. I can’t go less than that.”
Another operator, Abubakar Jamiu, at Zone 4, Abuja, was reported as saying, “Dollar don cost, we are selling at N730, no more no less.”
According to a report by Punch, the dollar rate hit N735 by the close of yesterday, Wednesday, 28th September 2022.
An operator in Lagos Island, Mallam Zakari, said that dollar rate had surged to N735 as at 4:54pm.
“Dollar is N735 and I will buy it for N731. Yesterday, we sold N728.”
However, at the Importers and Exporters Window, rate still hovered around N430/$.
The dollar-naira exchange rate was N431.19 as of Tuesday.
Analysts said the naira had weakened in the parallel market due to increased speculations, falling external reserves, and low foreign exchange inflows.
Speaking on major factors responsible for the rate hikes in USD to naira, the Vice President Lagos Chamber of Commerce and Industry, Gabriel Idahosa, said that the immediate cause of dollar rate increment was the new Monetary Policy Rate of the Central Bank of Nigeria.
“The immediate cause of the dollar price hike is the increase in the Monetary Policy Rate from 13 per cent to 15.5 per cent announced by the Central Bank.
“Lending rates by banks and other financial institutions will rise following the MPR hike. This will lead to further rise in cost of operations by all businesses, aggravating the rising inflation. This has triggered further demand for dollars to avoid more decline in the value of any funds held in naira.”