Naira hits N800/$1 in official window, crosses N900 in black market

Naira dropped to another low on Monday, exchanging for N800 to a Dollar at the official window, the highest rate of the American greenback during trading in the official market.

Although the price of the dollar also went as low as N740.59/$1 before closing at N772.12/$1, which is lower than the N778.42/$1 rate reported at the close of trading.

During trading in the official market, investors and exporters recorded $40.21 million in foreign exchange transactions, compared to the $73.80 million transacted on Friday.

According to the foreign exchange data report obtained from the FMDQ Exchange, forex traders dropped the value of their transactions by $33.59 million or 45.51 per cent.

In the black market, dollar rate crossed N900 during trading, as it was offered at an average rate of N903.5/$1. This contrasted with the N898.6/$1 rate the United States currency went for on Friday.

READ ALSO: Naira begins new week on shaky ground, now N778.42/$1b at official market

Also, the United Kingdom’s currency, the pound, appreciated in value against the naira in the parallel market, as both currencies exchanged at an average rate of N1152.9/£1, rising from N1146.7/£1 rate.

This is according to the black market aggregator, Naira Rates, which reported an increase in the euro as well, having traded at an average rate of N988.3/€1, up from N983/€1.

In mid-August, the dollar was quoted as low as N955/$1, stoking fears among investors that the exchange rate might plummet to N1000/$1.

The Tinubu administration, however, indicated its resolve to tackle the rapid depreciation of the exchange rate, bolstered by the central bank’s commitment to intervene.

Furthermore, the government publicized that the NNPC had secured a deal to borrow $3.5 billion, funds earmarked to boost supply amidst escalating demand pressures. Such measures buoyed the local currency, hinting that the black market premium over the official I&E Window might shrink to a mere 5%, a scenario welcomed by the market.

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READ ALSO: Naira plummets to N900/$1 at parallel market

Yet, recent insights from JP Morgan revealed that as of December 2022, Nigeria’s central bank possessed net reserves amounting to approximately $3.7 billion. This disclosure rattled analysts, and the exact cause behind the naira’s depreciation remains nebulous.

Adding another layer, Nigeria’s central bank declared its intentions to reincorporate BDC operators into the forex market, guided by a revamped set of protocols.

This maneuver was heralded by many analysts who described it as a judicious stride towards ameliorating liquidity at the retail level.