Naira crashes to new record low as forex demand pressure worsens

The exchange rate at the parallel market depreciated again to another all-time low on Tuesday to close at N557/$1 compared to N550/$1 recorded in the previous trading session.

This represents 1.3% depreciation and further widens the gap between the black market rate and the official rate.

The local currency crashed by N7 at the black market to hit a new low following CBN’s actions to channel forex demand away from the window as buyers scramble to buy the scarce dollars.

Currency speculators are taking advantage of the huge exchange rate difference between the official market and the black market.

The demand pressure for forex continued despite an 8% improvement in dollar supply at the official window.

READ ALSO: Naira falls further at black market, hits N550/$

Meanwhile, the exchange rate between the naira and the US dollar closed at N412.08/$1, at the official Investors and Exporters window.

Naira appreciated against the US dollar on Tuesday, to close at N412.08/$1 as against the N412.75/$1 recorded at the close of trade on Monday, 13th September 2021, representing a 0.16% gain.

The opening indicative rate closed at N412.18/$1 on Tuesday, 14th September 2021, a 28 kobo gain when compared to N412.46/$1 recorded on Monday, 13th September 2021.

An exchange rate of N414.90 to a dollar was the highest rate recorded during intra-day trading before it settled at N412.08/$1, while it sold for as low as N400/$1 during intra-day trading.

Meanwhile, forex turnover at the Investors and Exporters (I&E) window rose by 8.2% on Tuesday, 14th September 2021.

According to data from FMDQ, forex turnover increased from $161.82 million recorded on Monday to $175.10 million on Tuesday 14th September 2021.

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Meanwhile, recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recorded growth in the country’s foreign reserve position could be a positive step towards hitting the projected target.