Naira Falls To Historic Low As 1 Dollar Sells Above N800, Black Market Rate Worsens

• Nigerian currency, Naira, has hit another new low in the foreign exchange market against the US dollar
• This comes a few days after the CBN announced the readmission of 43 banned items into the official window
• Legit.ng had raised concerns about CBN's decision to readmit the 43 ban items before solving the main issues in an earlier report.

Naira has dropped to the lowest levels in the official Investors and Exporters (I&E) window and in the parallel and peer-to-peer unofficial markets.

Data obtained from FMDQ Securities reveals that the Nigerian currency depreciated against the US Dollar in the official market to N848.12 on Tuesday, October 17, 2023.

This represents a 9.64% decrease, or a loss of N74.58, in just one day of trading when compared to the exchange rate of N773.54 on Monday, October 16, 2023

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It is the first time the Nigerian currency has closed a day's trading in the Central Bank of Nigeria (CBN) official market above N800 against the US dollar.

This happened as the official window came under pressure amid a significant rise in FX demand following the decision by CBN to readmit 43 banned items into the official market

FMDQ reports that the market forex transactions at the I&E window on Tuesday increased by 39% or $ 37.7 million to $134.28 million from $96.58 million a day earlier.

It is more likely the pressure will continue in the days ahead as Nigeria is a majorly import-dependent country.

Legit.ng earlier predicted that the CBN's decision to reintroduce 43 banned items to the official market would bring more troubles for the Naira. It appears it did not take too long.

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Naira to dollar at the black market

It was the same sad story for the Naira in the unofficial markets, the parallel and P2P windows.

AbokiFX's data shows that the black market's Naira continued to fall, reaching an exchange rate of N1,060 against the US dollar on Tuesday.

Tuesday's exchange rate is also the lowest level the Naira has dropped in the black market.

Also, at the P2P window mainly used by Fintechs, Naira crashed to N1,080 to a dollar on Tuesday.

It remains to be seen what the CBN has in store in the days ahead to aid the Naira's recovery from the significant battering it has endured.

CBN explains decision to lift forex ban on 43 items, IMF agrees

The CBN, in an earlier report, defended its decision to raise foreign exchange restrictions on 43 items after eight years

According to new CBN directives, Importers of items such as toothpicks, cement, and rice will now have full access to purchase dollars at official markets

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Big boost for Naira as Nigeria’s foreign reserves record first gain in 5 months

Source: Legit.ng