Naira Breaks Record, Falls to Lowest in Both Official And Parallel Markets Amid CBN Devaluation Denials

Naira Breaks Record, Falls to Lowest in Both Official And Parallel Markets Amid CBN Devaluation Denials

  • The Nigerian currency has lost about 1% of its value since Tinubu became President
  • The naira hit a nine-month low across all major markets, trading above N600 at the official market and N773 at the black market
  • The development follows Tinubu’s plan to unify the exchange rate, which analysts say may be pegged at N600 per dollar

The Nigerian naira has hit a nine-month record low across all the major markets, extending its losses since President Bola Tinubu mulled a unified exchange rate.

Bloomberg reports that the naira fell by 1% to N471.9 to the dollar on Thursday, June 8, 2023, its biggest fall since December last year.

Naira, Tinubu, dollar
President Bola Tinubu Credit: Bassey edoho
Source: Getty Images

Naira may unify at N600 to a dollar

Investors and economists expect the multiple exchange rates of the naira to merge over time at around N650 to the dollar, but it remains to be seen if the merger has begun.

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The naira has fallen since Tinubu said during his inauguration speech in May that the CBN should work to bridge the gap in the official and black market rates.

BusinessDay reports that the black markets in Nigeria can be as comprehensive as 60%.

On Friday, June 9, 2023, the naira traded at N773 per dollar on the black market, confusing traders.

Black Market traders reveal reasons for naira's fall

Findings by showed that the scarcity of forex squeezes the naira as CBN auctioned forex at N667 this week.

Ishaya Abdul, a currency trader along the Allen Avenue axis in Lagos, told that the scarcity of the dollar is to blame for the fall in the naira.

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“We cannot get the dollar to buy from the banks lower than N600. All the banks sell above N600 to a dollar, and some even sell as high as N670 per dollar,” Abbdul said.

Ofonime Umoh, a tech enthusiast, told that he has been looking for where to buy the dollar for at least N770.

“As I am talking to you, all the currency traders call N773 to a dollar. I quoted lower than the amount to most of my clients. Now I might have to return their money,” he said.

The development follows the CBN’s rebuttal that it has not devalued the Nigerian currency.

However, businesses report that they have been accessing forex above N600 per from the banks, negating the apex bank’s denial.

Naira weakens against US dollar as CBN continues plan to achieve President Bola Tinubu dreams reported earlier that the Central Bank of Nigeria has permitted a 2% depreciation of the Naira against the US dollar as President Bola Tinubu moves to unify the country's exchange rate.

According to Reuters, the apex bank permitted traders to exchange the Naira on Wednesday, June 7, 2023, at a weaker rate of 476 Naira per dollar, marking a new all-time low at the official market.


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