Naira experiences a decline in value, reaching N1,000/$ in the official market

The Central Bank of Nigeria has been taking steps to fortify the foreign exchange market, but on Thursday, the naira closed at N996.75/$ on the Investor & Exporter forex window.

Its closing price on Wednesday was N874.71/$, a decrease of 13.95 percent. Details on the FMDQ OTC Securities Exchange show that since the naira opened the week at N780.23/$, it has lost 27.75 percent of its value thus far.

The news that the apex bank was clearing part of its backlog caused the naira to strengthen against the dollar last week, but since then, it has steadily declined in both the official and black markets.

The World Bank has classified the naira as one of the worst performing African currencies as of now, having lost around 40% of its value.

The value of the currency has also decreased on the black market, where it was valued at N950/$ on Friday and about N1,140/$ on Thursday, according to Bureaux De Change employees who talked with The Punch. This indicates a 20% reduction.

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The trader, identified only as Kadri, stated, “N1,100 is the amount if you wish to sell. For N1,140, if you’d like to purchase. Awolu, another trader, said he would purchase the dollar from our correspondent for N1,100.

The PUNCH was informed earlier in the week by Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria, that the reason the dollar was strengthening against the naira was because those who had purchased it at a higher rate were holding onto it.

Speculators are constantly considering aspects of sustainability, he stated. They start to respond as soon as they realise the injection is not continuous. They start to respond. We are seeing the market’s response to it. There is opposition as well. Some people who paid more for their purchases are not favoured by this. Individuals are unwilling to sustain additional losses.

The presidency has said that it is preparing initiatives to bolster the local currency due to concerns about the decline in value.

“For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the central bank is rolling out the policies and the government that I serve, led by the President, will shock some of them,” stated Dr. Tope Fasua, Special Advisor to the President on Economic Matters, while speaking on behalf of Vice President Kashim Shettima.