Naira Continues Its Downward Spiral, Falls to N710 Per Dollar on The Peer-to-Peer Market

Naira Continues Its Downward Spiral, Falls to N710 Per Dollar on The Peer-to-Peer Market

  • The Nigerian currency, the naira has continued its downward spiral on Wednesday, July 27, 2022, selling at N685 against the dollar
  • Checks reveal that in the Peer-to-Peer market the naira depreciated to almost N700 per dollar while it sold at N665 at the parallel market
  • Experts blamed the naira volatility on the continuous intervention of the Central Bank of Nigeria on the forex marker as external reserve also witnessed a decline

The naira has continued its downward fall as it is inching towards N700 per dollar on the Peer-to-Peer (P2P) market, selling at N685 against the US greenback.

Findings from the crypto P2P exchange reveal that it traded at N667.5 per dollar on Tuesday, July 26, 2022, as demand for forex surged amid scarcity, a Nairametrics report said.

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Naira, Exchange rates, CBN
Naira crashes further Credit: Bloomberg / Contributor
Source: Getty Images

Naira's plummet dims hope of economic recovery

The P2P market is usually traded in small volumes and the unit of the exchange is the cryptocurrency USDT, which is a stablecoin pegged at 1:1 with the dollar.

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Also, Bureau De Change (BDC) operators sold foreign exchange at N655 per dollar on Tuesday, July 26, 2022, showing a sustained fall of the Nigerian currency.

Forex inflows range between N665-N680 according to checks.

The Naira fell flat against the dollar, selling at N710 per dollar at the parallel market, otherwise known as black market.

The Investors and Exporters (I&E) window has seen some downward trends recently, while the naira is experiencing huge volatility and disparity in the unofficial markets.

Importantly, the naira fell to N431 per dollar at the I&E window on Tuesday which is the lowest rate recorded since the beginning of 2022.

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This follows a decline in the volume of foreign exchange available in the market. On Tuesday, July 26, 2022, just about $58.03 million in foreign exchange value exchanged hands which represents a 35 per cent fall in comparison to $89.8 million traded the day before.

Market watchers have blamed the naira volatility in the parallel market. BDC operators also blamed the increase in demand and panic-buying for the scarcity of the dollar.

However, some P2P exchange markets traded at lower rates early on the morning of Wednesday, July 27, 2022.

Foreign reserve dips also

Meanwhile, Nigeria’s external reserve has fallen again immediately after recording consecutive appreciation for 27 days.

The external reserve has lost $138.7 million consecutively in the last five days.

Analysts say the decline in the external reserve is largely blamed on the intervention of the Central Bank in the I$E window as Nigeria practices managed floating exchange rate system that lets the Central Bank of Nigeria (CBN) regularly intervene in the forex market.

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In the week before, a total of $840.5 million was traded in the market, which is a great improvement in comparison to the $211.98 million traded in the two weeks preceding it.

Naira falls to a new low against Dollar, Euro, Pound at official market as politics takes centre stage

Recall that reported Nigerian currency, for the second straight day, has recorded a poor performance against all foreign currencies.

This happens as the ruling All Progressives Congress (APC) in Abuja holds its presidential primary.

Data obtained from FMDQ securities where Naira is officially traded showed that in the investors and exporters market, the Naira value dropped N420.75 on Tuesday, 7 June.


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