Naira Depreciates on the Black Market at N747 per Dollar, Lowest Decline in 2023

Naira Depreciates on the Black Market at N747 per Dollar, Lowest Decline in 2023

  • The naira has fallen to its lowest since 2023 at the parallel market to trade at N747 to a dollar
  • Information obtained from black market operators indicates that the fall is due to the coming Chinese holiday
  • However, the naira firmed up at the official Investors' and Exporters' (I&E) window at N454 to a dollar

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The Nigerian currency has fallen to one of its lowest since the beginning of the new year, according to information gathered from parallel market operators.

The exchange rate between the naira and the US dollar at the unofficial black market fell on Tuesday, January 17, 2023, to trade at N747 per dollar, representing a 1.63 per cent decline compared to the N735 to a dollar it has sold in the last three sessions.

Black market, naira, official market, CBN
Naira depreciates to its lowest in 2023 Credit: Richard Darko
Source: Getty Images

Demand for dollar due to Chinese new causes Naira's decline

Information from the parallel market operators indicates that the fall is due to increased demand for foreign exchange due to the forthcoming Chinese New Year holiday.

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The holiday which is slated for between January 21 and 27 of this year has piled pressure on the demand for foreign exchange in Nigeria as traders rush to preorder goods from the Asian country ahead of the holiday.

Reports say the exchange rate at the crypto Peer-to-Peer market fell by 0.50 per cent on Tuesday, January 17, 2023, trading at a minimum of N747.7 per dollar compared to N743.95 to a dollar sold at the time the day before.

Naira appreciates at official market

The exchange rate at the Investors and Exporters (I&E) window traded at N445 to a dollar on Monday, January 16, 2023, indicating o.09 per cent rise, according to the information posted on the website of the Central Bank of Nigeria (CBN).

There was a surge in foreign exchange turnover at 175.2 per cent as of Monday, January 16, 2023, in contrast to N73.18 million traded on Friday, January 13, 2023.

However, Nigeria’s external reserves fell marginally at 0.002 per cent to $37.206 billion as of January 13, 2023.

The exchange rate at the official NAFEX window closed at N461.5 to a dollar on Monday, January 16, 2023, compared to N461.9 to a dollar recorded in the previous trading session.

CBN adamant on January 31 deadline for cessation of old naira notes

Naira had begun the year strong especially as the CBN mopping up old notes ahead of January 31, 2023 deadline for cessation old banknotes.

The apex bank has said it will not shift its stand on the date and mounted a countdown clock on its website, reminder to the January 31, 2023 date.

The bank has threatened to punish commercial banks that fail to dispense the new naira notes from their ATMs, a directive most banks continue to flout few days to the deadline.

Experts predict naira exchange rate to the US dollar, and other currencies in 2023

Meanwhile, reported that in light of the Naira's woes, economists have provided a peep into the future of what Nigerians should expect in 2023. Y

You will recall that reported the Naira lost more than 23% of its value in 2022, the biggest devaluation in a single year since it was introduced as Nigeria’s store of value and medium of exchange on January 1, 1973.

Economists such as Bismark Rewane, CEO of Financial Derivatives Co Ltd, Johnson Chukwu, CEO of Cowry Asset, Dr Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise (CPPE), and Prof Pat Utomi, political economist, have all provided good and bad predictions for the Naira in 2023.


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