President Tinubu’s Plan in Disarray as Exchange Rate Gap Widens Again, Naira Trades For N860 Per Dollar

• The exchange rate gap between the official and parallel markets has grown wider
• As of Wednesday, July 19, 2023, the naira traded for N860 to a dollar on the black market
• On Tuesday, July 18, it traded for N742 to a dollar at the official Investors and Exporters (I&E) window

Nigeria’s President Bola Tinubu's plan to unify the exchange rate is further falling apart as the gap between the official rate and the parallel market has grown wider again.

The Nigerian currency, the naira, continued its downward spiral on Wednesday, July 19, 2023, at the parallel market when it fell to N860 per dollar.

Naira depreciates by N35 naira on the black market

TheCable reports that the figure represents an N35 or a 4.2% drop compared to the N825 it traded on Tuesday, July 18, 2023.

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The current depreciation value shows that the gap between the official and the black market rate is widening again, defeating the Federal government’s plans.

The naira has continued to experience volatility and fluctuations since Nigeria unified the exchange rate windows in June.

According to data from FMDQ, at the Investors and Exporters (I&) window, the naira appreciated by 6.58% against the dollar to close at N742 on Tuesday, July 18, 2023, data from FMDQ shows.

Bureaux de change operators in Lagos and parts of Ogun said there is a high demand for foreign currencies in the black market, which analysts blamed on a recent Central Bank of Nigeria (CBN) policy.

CBN policy to blame for wide gap in exchange rate windows

They say the policy mandates banks to demand Tax Clearance Certificates from customers before they can access FX at the official rate.

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Street traders put the buying and selling prices of the dollar at N840 and N860 per dollar, respectively.

Nigeria began the FX rate unification journey on June 14, 2023, when it collapsed all the Forex windows into the I&E window. It revealed that it will now operate the willing buyer and willing seller model, allowing market forces to determine the price.

Naira makes biggest recovery in 4 years at the official market, sells for N742 per dollar

Legit.ng reported that the exchange rate between the naira and the dollar gained about 6.58%, closing at N742.93 per dollar on Tuesday, July 18, 2023.

The gain represents the biggest daily gain witnessed since Nigeria began the unification of the exchange rate windows in the country on July 14, 2023. It is also the highest daily gain since 2019.

Reports say the foreign Exchange turnover increased to 352% to close at N156.29 trillion, the biggest volume of Forex traded since June 30, 2023.

Source: Legit.ng