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Naira Crashes Against US Dollar at Black Market as Nigeria's Foreign Reserves Hit 20-Month Low
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Naira Crashes Against US Dollar at Black Market as Nigeria's Foreign Reserves Hit 20-Month Low

by  Dave Ibemere 2 min read
  • The value of the Naira recorded a mixed performance against the US dollar in the forex market
  • At the official market, the naira appreciated, while at the unofficial forex market, the Nigerian currency depreciated
  • This happened as CBN data showed that Nigeria's foreign reserves have dropped to a 20-month low

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The value of the Nigerian naira depreciated against the US dollar at the unofficial foreign exchange market on Thursday, May 11, 2023.

This comes after a sharp fall in the value of the naira on Wednesday, May 10, 2023, following increased demand for dollars by importers at the parallel market, also known as the black market.

Naira to dollar exchange rate
Naira continues to wobble against the US dollar. Photo credit: @cbn

According to reports, the naira closed at N746 per dollar on the black market on Thursday.

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This represents a 0.26% drop in value for naira compared to N744 to a dollar it exchanged on Wednesday.

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The Naira also experienced a decline of N6 against the dollar in the peer-to-peer market, a platform many online shoppers and crypto traders use for currency exchange.

The day's trading ended with the naira closing at N758/$1 compared to its value of N752/$1 the previous day.

Official market good news

However, it was a different outcome for the naira in the official Investors and Exporters (I&E) market.

FMDQ reports that Naira officially closed Thursday's trade at N462.73/$, a 0.06% increase compared to Wednesday's trading rate of N463.02.

Foreign reserves drop to 20 months low

Meanwhile, checks by Legit.ng show that Nigeria's foreign reserves are at their lowest level in 20 months.

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"No more N900K": Airfares to US, UK, others get expensive as airlines adjust naira to dollar exchange rate

On May 10, 2023, the Central Bank of Nigeria Data disclosed that Nigeria's foreign reserves stand at $35.22 billion.

The last time Nigeria's reserves were this low was on September 14, 2021, when they were at $35.18 billion.

Nigerian Breweries blames CBN

Meanwhile, in another report, Nigerian Breweries disclosed that it experienced a decline in revenue of N10.71 billion in its Q1 2023 financial result.

The NB board attributed the drop in revenue to several challenges, including CBN's naira redesign policy.

The CBN announced the withdrawal of the old 1000, 500, and 200 naira notes in February, which led to a severe cash scarcity.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.

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