- Naira has again plunged to new lows on the parallel market, causing more headaches for the new CBN team
- It has been two weeks since lawmakers confirmed the Yemi Cardoso-led new CBN management team
- The new team is expected to meet next week for their first monetary policy meeting and is expected to create a clear direction for the forex market
The Nigerian currency, Naira, has plunged to its lowest level in history against the US dollar at the unofficial market amid supply woes and no clear direction from the Central Bank of Nigeria (CBN).
Black market traders who spoke to Legit.ng confirmed that one dollar was sold to Nigerians in search of foreign currencies at N1,040/$.
This represents a N20 or 1.96 per cent depreciation compared to Tuesday's exchange rate of N1,020.
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Naira depreciates as dollar supply drops by 86% after CBN lifts forex restriction on 43 items
Muhammdu Yusuf, a BDC operator in Lagos, said:
“We bought for N1,005/$ and sold for N1,035/$, N1040/$ on Wednesday. Dollar is still scarce. This is why the value of the naira has been falling"It seems it will take a while for naira to returns to around N900/$ exchange rate.”Also, Abubakar Mohammed, chief executive officer of Forward Marketing Bureau de Change Ltd., which compiles data on the informal market, said the Naira was sold at N1,035/$, Bloomberg reports.
It was also a similar story in the Peer-to-peer market, used mainly by Fintechs and cryptocurrency traders, as the Naira declined to N1,037 on Wednesday compared to N1,021 exchanged a day earlier.
Naira to dollar exchange rate at the official market
The depreciation also occurred in the foreign exchange market's official investors and exporters segment.
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Naira appreciates by 2.3% against US dollar as CBN ends forex ban on 43 items
Data from FMDQ Securities showed that the Naira at the I&E window fell slightly to N776.80 per dollar on Wednesday, down from the N765.83 per dollar exchange rate reported the previous day.
This decline happened because forex transactions on Wednesday amounted to only $29.06 million, marking the lowest level in recent history and indicating the supply challenges that Nigeria is facing.
CBN defends Naira with over $5 billion in six months
In a similar report by Legit.ng, the CBN sold over $5 billion to maintain naira stability in the foreign exchange market in the first six months.
The apex bank's intervention was carried out at the inter-bank Secondary Market Intervention Sales (SMIS) window.
The apex bank interventions have contributed to a decline in Nigeria's foreign reserves to $33 billion.
Source: Legit.ng
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