Naira hits a low of N1,050/$ on the black market

    Tuesday afternoon saw the Naira drop to an all-time low of N1,050 per dollar due to significant demand for dollars on the black market, often known as the parallel market.

    This indicates a 0.9% (N1) marginal devaluation from the N1,049 traded in the morning.

    At the parallel market, sometimes referred to as the black market, the local currency has stayed stable at N1,049 per US dollar since Friday.

    According to a vendor on Tuesday, people who wish to travel for work, education, health, or pleasure are purchasing dollars from street vendors as the official market is unable to satisfy their needs.

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    Naira hits a lowNaira hits a low
    Naira dollar

    On Monday, the official market saw a fall in foreign exchange (FX) market liquidity, which resulted in a weakening of the Nigerian naira against the US dollar by 18.72 percent.
    The dollar was trading at N778.80 at the close of business on Monday, compared to N764.86 on Friday in Nigeria’s official foreign exchange market, the Investors’ and Exporters’ (I&E) currency window.

    The daily foreign exchange market turnover, which shows the amount of liquidity or transaction in the market, decreased by 18.72 to $43.09 billion on Monday from $53.02 billion on Friday, per statistics from the FMDQ.

    The Central Bank of Nigeria (CBN) said that it will occasionally intervene in the Nigerian foreign exchange market to increase liquidity as part of its obligation to maintain price stability.

    The CBN stated, “These CBN interventions will gradually decrease as market liquidity improves.”
    The Central Bank of Nigeria declared that it will keep encouraging professionalism and orderliness among all players in the country’s foreign currency market in order to guarantee that market forces decide exchange rates according to the Willing Buyer-Willing Seller principle.

    The CBN stresses that in order to encourage price discovery, transparency, and credibility in the FX rates, it is recommended that the current FX rates be consulted from sources such the CBN website, FMDQ, and other approved or recognized trading systems.

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