Naira hits N388 to $1 at currency spot market

Nigeria’s local currency, the Naira traded at N388 to the dollar on Wednesday in Nigeria’s currency spot market.

This represents a price depreciation of 65 kobo from yesterday’s closing price of N387.35 to the dollar. Nigeria’s currency spot market is used by foreign investors and exporters.

The naira’s recovery has been attributed to the International Monetary Fund (IMF)’s approval of Nigeria’s $3.4 billion loan request.

It was further boosted by the Central Bank of Nigeria’s (CBN) statement last week that it had resumed the provision of foreign exchange to all commercial banks for individuals wishing to pay schools fees abroad, and small and medium businesses seeking to pay for essential imports needed to reactivate economic activities across Nigeria.

The Director, Corporate Communications, CBN, Isaac Okorafor, earlier explained that the Central Bank had all resources to meet genuine Forex users’ needs. He stated:

“With these actions, the CBN wishes to reiterate that it is adequately meeting the needs of all legitimate users, and our continued capacity to do so should not be in doubt.”

The Investors & Exporters FX Window is the market trading segment used by exporters, investors and end-users. It allows for FX trades to be made at currency exchange rates determined by current market conditions, thereby ensuring efficient pricing in the Nigerian currency market.

However, the exchange rate further depreciated at the black market, where businesses buy dollars transferred from one bank account to another. The exchange rate ranged from anything between N410 and N480, depending on who was buying or selling.

The naira had hit N460 last week at the black market (its weakest level in three years), as dollar scarcity crippled the market. Though the naira stabilized at the black market yesterday, it remained 16% lower than the official exchange rate which is pegged at N360.