Naira Falls to N755/$1 at the Black Market

The naira suffered further depreciation at the parallel market on Friday morning as it traded at a minimum of N755/$1 compared to N742/$1 recorded on Thursday.

This is according to information from black market operators interviewed by newsmen.

The rate at N755/$1 is the highest on record. It also indicates a market differential of N313.87/$1 between the official market and the parallel market.

Also, at the peer-to-peer cryptocurrency exchange, the exchange rate fell to N751.99/$1 against the US dollar on Friday morning from N748.7/$1 recorded during the previous trading session.

The local unit has continued to fall, exchanging at a higher rate ever since it hit a former local high of N719 against the dollar in September.

The depreciation of the local currency at the black market was attributed to increased demand and sustained FX scarcity in the market.

In 2021, the Central Bank of Nigeria (CBN) prohibited the sale of foreign exchange to BDC operators in a bid to arrest the fast fall of the country’s currency.

The apex bank had accused the BDCs of unauthorised sales of foreign exchange above the market they were authorised to serve.

BDC operators were a significant part of the black market before the ban, helping people who couldn’t legally access foreign currencies directly from the CBN to maintain their exchange rates.

Experts say the inability of BDC operators to obtain foreign currency from the CBN could have a significant negative effect on the economy of the nation by increasing pressure on the local currency.

On the other hand, the exchange rate at the official market remained stable at N441.13/$ as a result of the constant intervention by the CBN to curb exchange rate volatility.

Consequently, the nation’s external reserve has suffered a loss of over $2 billion year-to-date, falling to its lowest levels since 4th October 2022.

Specifically, the foreign reserve stood at $37.71 billion as of 19th October 2022 from $40.52 billion recorded as of the beginning of the year.

October 21, 2022