Naira Falls Massively Again Due to Dollar Scarcity – See New Exchange Rate Today.
The Nigerian naira’s value against the US dollar experienced a significant drop to N915/$1 at the Black market, according to reports received by GoldenNewsNg late Thursday. This marks a substantial depreciation from its previous rate of N840/$1 observed last week, subsequent to a cautionary message from the central bank to speculators about a potential decline.
During the early hours of Thursday, the exchange rates hovered around N900-N910/$1. However, the later evening saw a sharp decline, indicating a surge in rapid demand as supply challenges persist.
In the middle of August, the dollar had been quoted as low as N955/$1, sparking concerns among investors that the exchange rate might reach N1000/$1.
The administration led by Tinubu expressed its determination to address the swift depreciation of the exchange rate, boosted by the central bank’s commitment to intervene.
Moreover, the government announced that the NNPC had successfully secured a $3.5 billion loan deal intended to enhance supply in the face of escalating demand pressures. These measures bolstered the local currency, hinting at a potential reduction in the black market premium over the official I&E Window to around 5%, a development welcomed by the market.
However, recent insights from JP Morgan revealed that as of December 2022, Nigeria’s central bank held net reserves of approximately $3.7 billion. This disclosure raised concerns among analysts, and the exact cause behind the naira’s depreciation remains unclear.
Operators, who spoke to Nairametrics anonymously, suggested that the decline in the currency’s value could be attributed to mounting demand pressures. One operator, known simply as “Musa,” speculated that the currency’s brief appreciation earlier in the week was driven by speculator concerns over potential appreciation. Musa emphasized that authentic demand persists but remains unmet due to unresolved supply issues.
“Musa” stated, “We have heard a lot from the government, but we are yet to witness an increase in the availability of the dollar. Perhaps, when the flow of dollars becomes more consistent, the exchange rate will strengthen.”
Adding another dimension, Nigeria’s central bank declared its intention to reintegrate Bureau de Change (BDC) operators into the foreign exchange market, guided by revised protocols. This move was praised by several analysts who spoke to Nairametrics as a prudent step toward improving liquidity at the retail level.
In related news, trading on the official I&E window on August 22 saw the naira-to-dollar exchange rate settling at N770/$1, a decline from the previous day’s rate of N761.32. The intraday high reached N799.9/$1, while the intraday low dropped to N720/$1. The day’s market activity recorded a turnover of $122 million.
AbokiFX, a currency tracking platform, also reported exchange rate trades at N900/$1 on Tuesday.
