On Thursday, the value of the naira declined against the US dollar, trading at N1,309/$ on the official market and N1,420 on the black market.
The new rate, which shows a 6.8% devaluation from the N1,330 price given by currency dealers on Wednesday, is the result of fresh pressure on the dollar’s demand in the foreign exchange market.
Currency dealers at the well-known Wuse Zone 4 market claim that operators made a profit margin of N80 by purchasing the dollar note at N1,340 and selling it at N1,420.
In a phone conversation, Malam Yahu Abubakar stated, “We purchased at N1,340 and we are selling at N1,420 per dollar today.” The increased demand for the US dollar is the only factor contributing to the naira’s decline.
Although the CBN is attempting to resolve the issue, the market has not been impacted.
Abubakar Taura, a different dealer, cautioned against trading, citing continued worries that the CBN would implement some extreme steps to support the dollar.
He clarified that this fear was fueling high profit margins, giving traders a chance to recoup losses.
“Yes, the dollar is progressively increasing, but we are still cautious and fearful that it could plummet at any time. It would have been apparent to you that the profit margin is also substantial. We must make up some of our losses.
When comparing the current currency rate to the N1,125 per dollar quoted on April 12, 2023, on the parallel market, the naira has lost 26.2% in just two weeks.
The Nigerian Central Bank authorised the distribution of $15.83 million to 1,583 BDC operators on Monday. The purpose of the action was to increase the unofficial market’s liquidity.
The CBN announced the distribution of $10,000 to operators nationwide in a letter to BDCs. The goal of the allotment, which is made available to qualified end users at a rate of N1,021 per US dollar, is to stabilise the foreign exchange market.
In a letter to the Association of Bureau De Change Operators of Nigeria, the CBN stated that, as of Monday, April 22, 2024, all qualified BDCs must begin making Naira deposit payments to the designated CBN Naira Deposit Account Numbers. After receiving payment confirmation and all required paperwork.
By the close of Thursday’s trading on the official market, the value of the naira versus the dollar had dropped to N1,309.88. This represents a decrease of 0.10 percent from the N1,308.52 rate that was previously recorded on Wednesday.
According to a summary of the currency trade, the intraday peak dropped by N68, ending at N1,435 per dollar as opposed to N1,367. The intraday low, which was N1,098 on Wednesday, dropped to N1,100 today.
The amount of forex traded between a willing seller and a willing buyer increased by 61%, to $318.08 million, over the previous high of $197.54 million set on Wednesday at the Nigerian Autonomous Foreign Exchange Market.
Yemi Cardoso, the governor of the CBN, announced over the weekend that the Naira was deemed the best-performing currency in the world as of April.
Yemi Cardoso, the governor of the CBN, announced over the weekend that as of April 2024, the Naira is the currency with the best performance worldwide.
When it dropped to as low as N1,600/$1 on the official market and N1800/$1 on the parallel market in March, the naira was left in the unfortunate position of being the worst currency in the nation.
He said that this accomplishment comes after a number of adjustments to the foreign exchange market and is backed by favourable opinions from major global investment organisations.
Cardoso said this during a news conference held in Washington, DC, USA, on the fringes of the recently ended World Bank/IMF meeting.
But it’s unclear what tactics the central bank will employ to guarantee the naira’s stability over time.
