On the Nigerian Autonomous Foreign Exchange Market on Monday, the value of the naira fell to an all-time low of N1348.63 per dollar.
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This is a 51.21 percent decrease from the official market closing rate of N891.90/$ for the national currency last Friday, according to statistics from the FMDQ Securities Exchange.
The official exchange rate on Monday is the lowest that the nation has seen since the Central Bank of Nigeria introduced the national currency in June 2023.
The official window indicated that the naira had closed above N1000/$. The naira initially saw an all-time low of N1,099.05/$ on December 8. It closed at N1043.09/$ on December 28, 2023, and N1035.12/$ on January 3, 2024. It closed at N1089.51/$ on January 9, 2024, and N1082.32/$ on January 10, 2024.
The Federal Government and the Central Bank of Nigeria are trying to increase liquidity in the foreign exchange market, but the naira’s sharp decline versus the dollar is impeding their efforts.
In the foreign exchange market’s parallel window, the performance of the national currency is likewise not improving. As of Monday’s close of business, the naira dropped even lower to N1,450/$, according to Bureau de Change Operators. The naira ended the day on the parallel window at N1,420/$.
Abdusallam Abubakar, a merchant, told The PUNCH, “I’ll sell to you at N1,450/$ if you want to buy.” That is the cost for now. We purchase for N1440/$.
Abdusallam was confirmed by another operator, Magaji Mohammed, who said, “Dollar sells at N1450/$ today.”
In the peer-to-peer cryptocurrency market, the naira also suffered, trading at N1,429/$ on Binance’s P2P platform at the time this report was filed. A blockchain company called Chainalysis claims that Nigeria has one of the highest quantities of peer-to-peer exchanges worldwide.
The difference in currency rates between the official and alternative markets is now only N101.37 thanks to this new rate. The apex bank recently paid $2.5 billion to settle forex backlogs, but this hasn’t stopped the naira from declining recently.
The CBN made a $500 million payment on Monday to settle some forex liabilities. This comes after a $2 billion payment was made recently for the same reason. Reportedly, the bank owes $7 billion in foreign exchange backlogs.
A representative for the apex bank, Mrs. Hakama Sidi Ali, disclosed the $500 million payment in Abuja on Monday.
“The CBN Management is committed to settling all legitimate foreign exchange backlogs within a short time frame,” the spokeswoman stated.
In order to increase cash flow in the Nigerian foreign exchange markets for the short, medium, and long terms, Sidi Ali gave Nigerians assurances that the CBN is putting a comprehensive plan into action.
She continued, “The CBN’s focus is on addressing fundamental issues that have hindered the Nigerian FX markets’ effective operation over the years, as the governor said.”
The governor of the CBN, Olayemi Cardoso, stated that the naira is now undervalued while outlining some of the steps the bank is taking to save it.
The country’s pricing for products and services are predicted to suffer as long as the naira declines. Manufacturers recently warned The PUNCH that they may increase market pricing for commodities in reaction to changes in exchange rates.
