Dollar Falls Below N1,000 at P2P for 1st Time Since September as CBN’s Forex Solution Pays Off

Dollar Falls Below N1,000 at P2P for 1st Time Since September as CBN’s Forex Solution Pays Off

  • The Naira, for the first time in 44 days, increased to its highest level against the United States dollar at P2P market
  • The dollar exchange rate fell below N1,000 as the CBN repaid international banks, companies backlog of forex obligations
  • In recent weeks, the Naira has been trading at a record high in the official and black foreign exchange markets journalist Dave Ibemere has over a decade of experience covering business and the economy.

Dollar, for the first time since September 20, 2023 (44 days ago), is selling below N1,000 at the Peer to Peer(P2P) segment of the foreign exchange market.

The peer-to-peer market is mostly used by cryptocurrency platforms and Nigerians buying dollars from fintech apps.

Naira to dollar exchange rate
Naira value is on the rise again Photo credit: Tom Saater
Source: Facebook

Checks by show that naira exchange against the US dollar as of 09:00 West Africa Time (WAT) on Friday, November 3, sold at N995 against the US dollar compared to Thursday's closing rate of N1,113/$1.

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This indicates the Naira appreciated in just a few hours by N118 against the US dollar.

Why Naira appreciated

The Naira appreciated after it emerged that the Central Bank of Nigeria has started clearing backlogs of foreign debts to international banks and companies.

In a circular titled "Settlement of Matured FX Forwards by CBN," Citi Bank confirmed the payment of all outstanding matured forward FX, Punch reports.

The bank noted:

“It is a gradual payment that was done secretly, CBN didn’t make a fuss about it. It started yesterday and continued all through the night.”

More gains for Naira are expected, in an earlier report, predicted the dollar exchange rate to Naira will fall below N1,000, and Naira will recover some of its lost value.

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“Naira gains more N500/$” Analysts name losers as CBN's intervention drives naira below N1,000/dollar

More gains are expected in the coming days as the CBN also anticipates an inflow of $10 billion to boost the market.

Taiwo Oyedele, in an interview with Bloomberg, revealed that the federal government expects an exchange rate of N650 to N750 by December 2023.

Similarly, JP Morgan, a global financials institution, in its note to investors, forecasted a N850 to a dollar exchange rate by the end of the year.

"No more N1k": BDC operators agree on new dollar to naira exchange rate also reported that Bureau de Change dealers want to crash the dollar across the country.

ABCON initiated the move in support of the CBN efforts to stabilise the Naira at the foreign exchange market

The wide disparity between the black market and the official exchange rate has been a genuine concern for the CBN.


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