Naira plummets against dollar, trades at 1,030/$

Monday saw a sharp decline in the value of the naira relative to the dollar, with an average rate on the parallel market of 1,030/$, reversing the previous week’s gains.

This suggests that the local currency fell by N80, or 8.42%, from the N950 it ended the week at last Friday.

For the first time since the Central Bank of Nigeria started paying down some of its foreign exchange debt last week, the value of the naira is likewise declining.

Operators of bureaux de change, or currency dealers, said that the value of the naira was fluctuating between N990 and N1,030/$.

“The dollar is N995 if you want to sell,” a trader going by the name Awolu stated. It is N1,020 if you would want to purchase from me. “If you want to sell, the dollar is N960,” said Kadri, another trader. It costs N990 if you wish to purchase.

As a result of consumers who purchased the dollar at a higher price fighting its decline after the Central Bank of Nigeria’s move last week, the dollar has appreciated vs the naira, according to Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria.

It was announced last week that the apex bank has started paying banks for unpaid matured foreign exchange futures.

This was done in an effort to increase foreign exchange market liquidity after weeks in which the naira dropped to all-time lows. The quantity of past-due forward payments, as stated by Finance Minister Wale Edun, was around $6.7 billion.

READ ALSO: BDC operators disclose the underlying reasons for Naira’s renewed vigor in the FX market

The naira gained almost N220 as a result of this action, as it had closed the week at N950/dollar on the parallel market. It appears that the naira has suddenly lost its impetus. Gwadabe confirmed the dollar’s closing price, stating, “In the afternoon, it was N1,015 and N1,020/$.” At N1,030/$, it closed.

“Speculators are always looking at elements of sustainability,” he emphasised. 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 more losses.

The market must continue to receive confidence from us if we are to maintain the current pace. Announce to the market the opening of a new window and increase liquidity. The retail end is located in the parallel market. Furthermore, there is currently no information available regarding how liquidity will enter that industry. The only thing we know is that the formal foreign exchange market will progress with the inclusion of BDCs. In the FX market, we cannot wait.”

Additionally, according to information on FMDQ OTC Securities Exchange, the naira fell by 3.6% in the official market, closing at N809.02 to the dollar on Monday after closing at N780.23/$ on Friday.