Naira Loses more value against US dollar at official and Black market.
The Nigerian Naira’s ongoing battle against the US Dollar has persisted, with the nation’s currency experiencing a further decline in value across all foreign exchange markets on Thursday, October 5, 2023. This disheartening trend has been characterized by supply shortages and a lack of clear guidance from the new management team at the Central Bank of Nigeria (CBN), even weeks after their confirmation by the Nigerian Senate.
No Policy Direction from the New CBN Management
Despite the confirmation of Mr. Yemi Cardoso and four other deputy governors, the CBN’s new leadership has yet to articulate a clear policy direction, particularly regarding forex supply. This absence of strategic direction has left the market in a state of uncertainty and has fueled reactions within the forex market.
Naira’s Exchange Rate Decline
Data from FMDQ Securities revealed significant declines in the Naira’s exchange rate against the US Dollar in various market segments:
- Investors and Exporter Window (Official Market): The Naira closed at N775.20 against the US Dollar at this market segment. This represents a substantial 2.51% drop in value compared to the previous trading day when it was valued at N756.21/$1 (Wednesday, October 4, 2023).
- Peer to Peer Section: Typically frequented by cryptocurrency traders and fintech platforms, the Naira depreciated against the US Dollar on Thursday, reaching N1,009/$1, compared to the previous day’s rate of N1,005/$1.
- Parallel Market: The Naira’s value also eroded further against the US Dollar in the parallel market, with an exchange rate of N1,001/$1 on Thursday, echoing Wednesday’s rate of N1,000/$1.
Impact on Other Currencies
The struggles of the Naira are not limited to its exchange rate against the US Dollar. In addition:
- Pound Sterling: The CBN reported that the Naira closed at N927.40/£1, compared to the previous rate of N904.75/£1, indicating a depreciation against the Pound.
- Euro: The Naira’s value diminished by N17.95 against the Euro, with an exchange rate of N801.81/€1 on Thursday, contrasting with the previous rate of N783.86/€1.
These developments underscore the challenges facing Nigeria’s foreign exchange market and the broader economy. The lack of clarity and policy direction from the CBN, coupled with supply issues, continues to exert downward pressure on the Naira’s value, impacting businesses, investors, and ordinary citizens alike. Observers and stakeholders will be closely monitoring the situation, hoping for stability and a path toward economic recovery in the near future.