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Naira tumbles to all-time low of N950/$ at parallel market

August 10, 2023
2 Min Read

 

The naira fell to an all-time low of N950 to a single dollar
at the parallel market on Thursday afternoon.

 

The figure represents a N53 or 5.9 percent depreciation
compared to the N897 it traded earlier this week.

 

Bureaux De Change (BDC) operators in Lagos who spoke to
TheCable, said that there is high demand for foreign currency in the street
market.

 

The street traders, popularly known as ‘abokis’ put the
buying price of the dollar at N935 and the selling price at N950, leaving a
profit margin of N15.

 

Meanwhile, currency traders in the Agbara area of Ogun state
said they are currently buying the local currency at N920/$ and selling it for
N940 per dollar.

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“Dollar is scarce now. The rate keeps going up and I don’t
even know why. Despite that, people are still coming to buy the little they can
get,” Aliyu, A BDC operator in the market, told TheCable.

 

At the investors and exporters (I&E) window, the local
currency depreciated by 3.28 percent against the dollar to close at N782.38/$
on Wednesday, according to FMDQ OTC Securities Exchange, a platform that
oversees foreign-exchange trading in Nigeria.

 

An exchange rate of N800 to the dollar was the highest rate
recorded within the day’s trading before it settled at N782.38.

 

The total value of trades recorded at the I&E window on
Wednesday stood at $60.26 million.

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In mid-June, the Central Bank of Nigeria (CBN) introduced
major reforms that disrupted the foreign exchange market scope.

 

Prominent among the policies include the unification of all
segments of the forex exchange (FX) market ( allowing the local currency to
freely float) and the re-introduction of the “willing buyer, willing seller”
model at the I&E window.

 

Since the government unified the exchange rate windows, the
naira has consistently experienced fluctuations at the official window and a
surge in depreciation at the black market.

 

Last month, the Economist Intelligence Unit (EIU), an arm of
The Economist of London, predicted that the Nigerian government would go back
to a system where they have more control over the exchange rate.

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The UK-based platform said the move would be taken to try
and stop the naira from losing its value much further.