New Exchange Rate As Naira Crashes Against Dollar in Official, Black Markets
- The value of the naira has depreciated both in the official and unofficial foreign exchange markets
- The naira fell by 0.3% in the official market and lost N45 in the black market against the US dollar
- The new exchange rates are a reversal from the performance recorded in the last few days after CBN introduced EFEM
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 Nigerian naira has recorded poor performance against the US dollar in the official foreign exchange market.
According to the FMDQ Securities Exchange, the naira at the Nigerian Autonomous Foreign Exchange Market (NAFEM) depreciated by N5.23 or 0.3% to N1,547.50/$1 on Wednesday, December 11, from N1,542.27/$1 it was valued on Tuesday.
Source: Getty Images
Market observers attributed the decline to speculative activities as traders sought to bolster foreign currency holdings, countering recent gains in the official market.
Naira's rate against the pound, euro
Data from the CBN shows it was the same story for the naira weakened against the pound sterling by N3.56, ending at N1,958.68/£1, compared to the previous day's N1,955.12/£1.
Similarly, against the euro, it dropped by 34 Kobo, trading at N1,612.66/€1, down from the prior session's N1,613.00/€1.
In the black market, traders who spoke to Legit.ng said the naira lost N45 against the US dollar on Wednesday, quoting N1,670/$1 compared to the N1,625/$1 it traded the day before.
Expert speaks
Reacting to the current exchange rate of the naira, Aminu Gwadebe, the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), has urged the CBN to sustain its efforts.
He canvassed for a closer relationship between the CBN and BDCs.
His words:
"The Central Bank of Nigeria's (CBN) intervention in the BDCs sub-sector, the third level of the market, aims to achieve convergence between the official and parallel market rates, facilitating price discovery.
"So far, the CBN's intervention in the BDCs sub-sector has proven to be the most effective and potent policy tool for achieving its mandate of price stability.
"The challenge lies in the volume and frequency of the CBN's intervention in the BDCs.
"Therefore, I advise that, to sustain the success achieved and enhance policy effectiveness, the CBN should continue to leverage the BDCs to fulfill its core mandate."
CBN denies selling US dollars to BDCs at N1,301/$
Earlier, Legit.ng reported that the CBN clarified a fake circular regarding the sale of dollars to BDCs.
The apex bank advised Nigerians to ignore the circular's content and completely deny its authenticity.
The CBN occasionally sells dollars to BDCs to counter the dollar's strong performance in the black market.
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Source: Legit.ng
