Aminu Gwadabe, president of the Association of bureau de change operators of Nigeria (ABCON), says the free fall of the naira is due to activities of Nigeria’s immediate neighbors.
Over the week, the naira has been on a free fall at the parallel market, moving from 439 per dollar on Monday to 490 to the greenback on Friday morning.
The British pound and euro are also currently trading at N600 and N520 respectively.
According to Gwadabe, foreigners are mounting pressure on the naira by bringing in their dollar demand to Nigeria, hence, mopping up the dollars in the system.
“For the past few days, what we have been witnessing in the market is a kind of spike, a lot of volatility in exchange rate, and this has to do with fear,” Gwadabe told CNBC Africa.
“A lot of people are developing fear, and as a result of that, no naira is being kept. People are moving from naira to dollar.
“A very worrisome factor that we have been witnessing in the market is that the market has recently been bombarded by people from neighbouring countries to meet their demands.
“What I mean by neighbouring countries is that a lot of demand is coming from Benin Republic, from Chad. International demand is also accumulating; we see a lot of Chinese traders coming into the economy, mopping up any available dollar.”
Gwadabe said ABCON and Travelex are now into a partnership, which would take off soon, thereby easing the stress on the local currency.
The bureau de change boss expressed support for the proposed sale of some national assets to beef up foreign reserves and support the naira.