Naira Falls to N760 Per Dollar on Black Market as Forex Supply Hits $15.2 Billion
- The naira plunged to about N760 per dollar on Monday, May 22, 2023, after trading strong the week before
- The Nigerian currency witnessed a 0.66% fall compared to the same period a week before
- The development follows an increase in the supply of foreign exchange to the tune of $15.2 billion
The Nigerian currency experienced a considerable fall against the United States dollar on the black market, settling at an average exchange rate of N760 per dollar on Monday, May 22, 2023.
The fall marks a 0.66% decline compared to the day before, when the naira traded at N755 per dollar.
High demand for dollar leads to naira's fall
On Thursday, May 18, 2023, the naira traded at N745 per dollar.
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Analysts say the increase in demand for the dollar contributed to the depreciation, following a period of stability earlier in the week.
The Nigerian currency depreciated against the Euro by 0.62%, trading at an average rate of N815 per Euro on Monday, May 22, 2023, compared to the N810 it traded on Friday, May 19, 2023.
The naira, however, remained steady against the pound to trade at an average of N946 per pound on May 19, 2023.
CBN increases forex supply in the market
A Nairametrics report says that the parallel exchange rate varies across different markets across the country and is primarily influenced by factors such as survey timing, demand and supply dynamics, purchasing power, and other factors.
The development comes as the country’s foreign exchange supply via the official window increased to $15.2 billion, data from CBN says.
The increase represents a 17.7% increase from $12.9 billion recorded in 2021 and a 46.4% increase from $10.4 billion in 2020.
The official window comprises the Wholesale Dutch Auction System/Retail Dutch Auction System, the interbank market, the BDC market, the Investors and Exporters Window, Small and Medium Enterprises, and invisible segments.
Report shows naira lost half its value against US dollar under President Buhari
Legit.ng reported that the Nigerian naira's exchange rate against the United States dollar declined significantly during President Muhammadu Buhari's eight-year tenure.
BusinesDay reports that the naira weakened by 57.26% and 37.58% in the official and black markets.
When President Buhari assumed office in 2015, data from the Central Bank of Nigeria's official window indicated that the naira exchanged at N197/$ against the US dollar.