Naira Plunges at the Official Exchange Market, Despite Forex Supply

Naira Plunges at the Official Exchange Market, Despite Forex Supply

  • The naira continues to plunge further before the US dollar and major currencies of the world the CBN pumps foreign exchange into the market
  • On Thursday, the naira depreciated to N419 to a dollar at the official forex market and sold for N590 at the parallel market
  • In the same way, the external reserve went down below $39 billion to stand at $38.88 billion as against the $38.92 billion it was the day before

The official exchange rate between the naira and the US dollar closed at N419.25 per dollar at the Investors and Exporters (I&E) window, which represents 0.18 per cent depreciation.

Nairametrics reports that, the Nigerian currency reacted to earlier gains recorded in the previous trading session as the exchange rate between the naira and the US dollar depreciated by 0.18 closing at N419.25 per dollar in comparison to N418.5 it recorded on Tuesday, May 17, 2022.

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Naira, Dollar, Exchange rate, I&E window
Naira falls at the official market Credit: Mike Meek
Source: Getty Images

Naira buckles before the dollar and other currencies

Meanwhile, the supply of foreign exchange increased by 95.55 per cent to $201.34 million.

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In the same vein, the exchange rate against the US dollar went down by 0.33 per cent on the morning of Thursday, May 19, 2022, on the black market, exchanging at N605 in comparison to N603 per dollar recorded the previous day.

The Punch reports that information obtained from the Bureau de Change operators said that the exchange rate remained stable at N590 to a dollar in the parallel market.

External reserves dips further

The country’s external reserve plunged further below the $39 billion benchmarks on Tuesday, May 17, 2022, as the level recorded a 0.09 per cent decline to stand at $38.88 billion from $38.92 billion, making a seven-month low.

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In October 2021, the country’s external reserve stood at $39 billion.

The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Nigerian government spends N41.9 Billion on debt servicing in January alone

However, has reported that Nigeria’s monthly debt servicing increased by $31.46 million in one month to $101.29 million in January, according to figures released by the Central Bank of Nigeria (CBN).

The Punch report shows a 45 per cent jump month-on-month.

The CBN said in its data on debt service repayment that the federal government spent about $69.83 on debt service repayment in December.


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