Naira Crashes Again Against US Dollar at Official Market As CBN Governor Makes Promises
- The value of Nigerian currency has depreciated again in the official and unofficial foreign exchange markets
- Data shows that the naira is now at its lowest level in months, selling at above N1,500 a dollar in all markets
- The CBN has promised to find a solution to the naira's value in the coming weeks ahead, despite stopping the sale of dollars to BDCs
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The naira has crashed again to the US dollar, surpassing the N1,500 exchange rate mark in the official and parallel markets.
FMDQ data shows that the Nigerian Autonomous Foreign Exchange Market (NAFEM) naira closed at N1,500.79/$1 on Tuesday, June 25.
Source: Getty Images
Tuesday's rate indicates that Nigerian currency value depreciated by 0.71% or N10.59 against the US Dollar in the official market compared to Monday's rate of N1,490.20/$1.
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The naira's poor performance happened as the forex supply decreased by 10% or $15.25 million.
Banks, companies and other players in the official window on Tuesday exchanged $136.75 million compared to $152.00 million recorded on Monday.
Naira against the pound, euro
It was the same scenario for the naira naira official market for the British pound and the euro
CBN data shows that the domestic currency lost against the pound in the official FX market by N19.34 on Tuesday to sell for N1,890.86/£1 compared with Monday's closing price of N1,871.52/£1.
The naira value depreciated by N15.81 against the euro to sell for N1,598.78/€1 compared to the N1,582.97/€1 it was exchanged a day earlier.
Naira to dollar at black market
The fall of the naira continued in the black market as traders sold one dollar at N1,510/$1, which is higher than the N1,505/$1 quoted on Monday.
Abdullahi, a BDC trader, explained to Legit.ng that the depreciation of the naira is likely to continue due to the strengthening dollar and demand pressures.
He said:
"In the forex market, the dollar is gaining strength. If you check, even the yen is losing its value, so it's not just the naira. The reason it's more obvious for the naira is because we lack sufficient supply to meet our demands, The BDCs sell based on what we were able to source since the CBN again has stopped selling to us."
CBN makes promises
Despite the poor performance of the naira, Central Bank of Nigeria (CBN) Governor Yemi Cardoso has assured Nigerians that the worst is over for the naira fluctuation in the FX market.
Bloomberg reports that he also expressed satisfaction with the progress in curbing volatility.
His words:
“We do believe that we have more or less seen the worst in terms of volatility."
CBN stops BDC funding
Earlier, Legit.ng reported that the CBN reportedly stopped funding for Bureau de Change Operators.
The move aims to test CBN's reform template and minimise quick fixes in the FX market.
The CBN is reportedly reviewing significant policies to strengthen the implementation or tweak its reforms.
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Source: Legit.ng
