- Nigeria's currency hit an all-time low of N730 to a dollar at the parallel market on Thursday, September 29, 2022
- On Wednesday, the naira exchanged for N733 to the dollar at the parallel market, a further decline from what it exchanged at the previous day
- The decline came despite CBN's recent rate hike of 15.5 per cent and the mop-up of excess cash from the system meant to save the naira
The surging strength of the US dollar is having severe adverse effects on Nigeria's local currency despite moves by the Central Bank of Nigeria to mop up excessive liquidity in the system.
The recent moves by the CBN were supposed to stop the naira from further depreciation.
A continuous fall despite CBN's interventions
On Thursday, September 29, 2022, the exchange rate between the naira and the US greenback fell to a record low in the black market, trading at N730 per dollar.
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The naira deteriorated by 0.69 per cent compared to the day before.
Information gathered from the parallel market operators said the fall was due to the dollar scarcity, which put pressure on the local currency.
The decline in the exchange rate comes after the CBN raised the interest rate to 15.5 per cent, the highest since 2002. The rates hike represents a 150 basis point addition from the 14 per cent started at the previous MPC meeting.
According to reports, the N730 per dollar is the highest in the history of the naira, while traders said that they sold dollars for as much as N75 and bought at N725 and N75 per dollar.
Fourteen months ago, the CBN began the sale of forex to Bureau de Change operators, but the naira has been on a steady decline since as liquidity tightens.
Crypto peer-to-peer market also takes a hit
The naira in the peer-to-peer cryptocurrency market fell to N735 per dollar from N733 it exchanged the previous session.
The official market trading saw the naira exchange for N436.37 per dollar on Wednesday, September 28, 2022, a marginal decline of 0.01 per cent against N436.33 recorded the day before.
A total of $119.49 million in foreign exchange trading in the official market on Wednesday, September 28, 2022, was 20.17 per higher than the $99.43 million it exchanged for the day before.
$297.02 million was traded at the official market, inching towards the $534.35 million sold in the previous week. However, the CBN has maintained the currency's stability in the official exchange market through its constant intervention, helping the country's forex reserves.
Data from the CBN shows that Nigeria's foreign reserves have declined by over $2 billion year-to-date to stand at $38.36 billion from over $40 billion recorded at the end of last 2021.
Huge gap in black market, official exchange rate increase forex scam as banks publish more names, Zenith leads
Recall that Legit.ng reported that The widening difference between the black market and official rates has worsened the forex fraud, as banks publish more names of Nigerians attempting to cheat the system in an attempt to make more money.
As of Wednesday, 23 February 2022, the dollar exchanged for N416 at the official market and N575 at the black market. This is a gap of over N159.
Checks on the websites of ten commercial banks reveal that over 1,226 identities have been exposed thus far.