Naira Falls Massively against at Black Market – See New Exchange Rate
Naira Depreciates to N950 per Dollar Amid Scarcity
On Wednesday, the Nigerian naira experienced a significant depreciation, reaching N950 per US dollar at the parallel foreign exchange (FX) market. This marks a notable decline of N40 when compared to the exchange rate of N905 recorded on August 23.
Causes of Depreciation
Currency traders, specifically Bureaux De Change operators (BDCs), in the Ikeja area of Lagos attributed this depreciation to the scarcity of the US dollar. According to them, the buying price of the dollar reached N940, while the selling price was N950, resulting in a profit margin of N10.
A BDC operator named Shehu revealed that even some Nigerians are facing difficulties in withdrawing forex from banks. Despite the Central Bank of Nigeria (CBN) lifting the ban on the sale of forex to BDC operators, the banks are reportedly not selling forex to the BDCs.
Official Market Rates
In contrast, at the official market, the naira closed at N742.10 on the previous day, according to data from FMDQ Securities Exchange, the platform overseeing official foreign exchange trading in Nigeria. The market opened at N761.24 to the dollar, with a high of N807.15 and a low of N738 during the trading session. A total of $42.26 million was traded in foreign exchange at the official investors’ and exporters’ window (I & E) window.
CBN’s Directive
On the same day, the Central Bank of Nigeria (CBN) stated that a review of the change in the FX regime indicated that banks could profit significantly from the potential increase in the naira value of banks’ foreign currency (FCY) assets and liabilities. As a result, the CBN directed deposit money banks (DMBs) to cease using gains from the revaluation of the naira to pay dividends or finance their operations.
The depreciation of the naira in the parallel market highlights the challenges faced by Nigeria’s foreign exchange system and the ongoing efforts to address them.
Note: Exchange rates can fluctuate rapidly, and the figures provided here are based on the reported rates at the time of the article’s publication.