- The naira gained N8 at the black market on Tuesday, August 15, 2023, after CBN threatened to deal with black marker operators
- Feelers from market operators showed that the naira exchanged for N942 per dollar as against the N950 it traded on Monday, August 14, 2023
- The Central Bank of Nigeria had vowed to clamp down on Forex speculators causing volatility in the market
The naira gained against the US dollar at the parallel market, otherwise known as the black market, after threats by the Central Bank of Nigeria to apply severe sanctions against speculators.
At the parallel market, the dollar, which analysts feared inched close to N1,000, closed at N942 per dollar as against N945 per dollar.
Experts reveal the true value of the naira
The pressure on the naira at the black market began to thaw at the beginning of the week as the apex bank announced plans to boost dollar supplies in the coming weeks.
“We rebuke and bind”: Leaked chat shows naira exchanges at N1,000 per dollar, CBN ready to fight back
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According to them, the naira is undervalued by 6.26%, stating that their value is estimated at N720 per dollar.
The naira can only appreciate if the CBN saturates the market with enough Forex and reduces the deficit, analysts say.
How naira can appreciate in the FX markets as CBN vows to deal with speculators
The naira can only appreciate if there is an increase in crude oil prices and a boost in oil production, a reduction in global interest rates, and an increase in invisible inflows as investor confidence grows, analysts reveal.
Other factors supporting exchange rate appreciation include:
- An increase in oil prices and production.
- A reduction in global interest rates.
- An increase in invisible inflows as investor confidence improves.
The CBN had said that market forces do not cause the current naira depreciation but blame it on speculators.
The Acting CBN Governor, Folashodun Shonubi, said the government was ready to take action to save the naira.
“The president is very concerned about some of the goings-on in the foreign exchange market. One of the things we discussed was what could be done to stabilize and improve the market's liquidity and the goings-on in the various other markets, including the parallel market.
Daily Trust reports that the dollar crashed to N790 to a dollar at the parallel market beginning to decline from N925 to N930 in the morning,
The decline reportedly continued until around 4.00PM when the news of CBN's planned intervention filtered through.
Naira getting close to N1,000 per dollar as CBN explains reason for the fall
Legit.ng earlier reported that het Nigerian currency, the naira, has continued to plunge lower in the FX market.
On Thursday, August 10, 2023, the naira fell to its lowest in history, exchanging at N930 to a dollar as demand for the dollar by importers and other users surged.
The non-intervention of the Central Bank of Nigeria worsens the situation.