ENUGU, Nigeria (VOICE OF NAIJA)- On Monday, the Nigerian Autonomous Foreign Exchange Market witnessed the naira plunging to an unprecedented low of ₦1348.63/$, marking a significant 51.21 per cent decline from the ₦891.90/$ rate recorded at the official market last Friday, according to data from the FMDQ Securities Exchange.
This official exchange rate on Monday represents the worst in the country since the Central Bank of Nigeria (CBN) floated the national currency in June 2023.
The naira had surpassed the ₦1000/$ mark on the official window, reaching an all-time low of ₦1,099.05/$ on 8 December, 2023, and subsequently fluctuating within the ₦1,035 to ₦1,089 range in early January 2024.
Despite efforts by the CBN and the Federal Government of Nigeria to boost liquidity in the foreign exchange market, the naira continues to depreciate against the dollar.
On the parallel window, Bureau de Change Operators reported a further fall to ₦1,450/$ by the end of trading on Monday, compared to ₦1,420/$ on Friday.
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In the cryptocurrency peer-to-peer market, the naira traded at ₦1,429/$ on Binance’s P2P platform, emphasizing Nigeria’s substantial presence in global peer-to-peer exchange volumes, according to Chainalysis, a blockchain firm.
The recent rate brings the exchange rate gap between the official and parallel markets to ₦101.37.
A trader, Abdusallam Abubakar, told Punch, “If you want to buy, I’ll sell to you at N1,450/$. That’s the price for today. We buy at N1440/$.”
Another operator, Magaji Mohammed, corroborated Abdusallam, “Dollar sells at N1450/$ today.”
Despite the recent payment of $2.5 billion by the Central Bank of Nigeria to clear forex backlogs, including a $500 million payment on Monday, this ongoing depreciation occurs.
Mrs. Hakama Sidi Ali, the spokesperson for the CBN, announced the $500 million payment in Abuja on Monday, assuring Nigerians of the CBN’s commitment to settling legitimate foreign exchange backlogs promptly.
She emphasized the implementation of a comprehensive strategy to improve cash flow in the Nigerian foreign exchange markets in the short, medium, and long term.
She said, “The Management of the CBN is committed to settling all legitimate foreign exchange backlogs within a short time frame.
“As the governor said, the CBN’s focus is on addressing fundamental issues that have hindered the effective operation of the Nigerian FX markets over the years.”
CBN Governor Olayemi Cardoso acknowledged the undervaluation of the naira while revealing the central bank’s measures to save the currency.
The ongoing fall of the naira is anticipated to impact prices of goods and services in the country, with manufacturers considering potential hikes in response to exchange rate fluctuations.