Naira Crashes Against US dollar, CBN Releases New Exchange Rates
- Nigerian currency has reversed some of its gains and weakened against the US dollar in the foreign exchange market.
- Latest data showed that the naira depreciated in both the official and unofficial forex markets on Monday
- The decline of the naira is a result of growing market pressure and a lack of visible intervention over the past week from the CBN
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The value of the naira depreciated against the US dollar amid renewed foreign exchange (FX) pressure on Monday, October 6.
Data obtained from the Central Bank of Nigeria showed that the naira in the official market closed at N1,470.26/$1 after trading activities on Monday.
Source: Getty Images
Monday's rate is a N4.58 or 0.31% depreciation when compared with N1,465.68/$1 recorded last Friday.
Naira vs pound, euro
Nigerian currency also depreciated against the pound sterling in the official market, closing at N1,976.91/£1 from N1,972.51/£1 on Friday.
However, it gained N2.56 against the Euro to settle at N1,718.29/€1 compared with N1,720.85/€1 in the preceding session.
A check on GTBank’s exchange rate board showed that the naira lost N15 against the greenback, selling at N1,475/$1 on Monday, weaker than N1,460/$1 in the previous session.
Naira in the black market
The poor performance for the naira continued In the parallel market also known as the black market.
Traders told Legit.ng that the dollar exchange rose by N10 compared to previous week closing rate.
Abdullahi said:
“The dollar traded between a buy rate of N1,475 and a sell rate of N1,488 on Monday, up from N1,465 in the previous session. The euro also strengthened, with a buy rate of N1,720 and a sell rate of N1,735, while the Pound Sterling traded at a buy rate of N1,990 and a sell rate of N2,010.”
Analysts expectations for naira
Investment firms, Cordros Capital Limited and AIICO Capital, said that robust liquidity inflows from offshore investors and International Money Transfer Operators (IMTOs) would help provide supply support to mop up demand.
There is expectation that the naira will close at N1,480 and N1,500 per dollar in the short term.
Meanwhile, inflows from oil receipts, remittances, and portfolio investments have sustained the upward trend in Nigeria’s foreign reserves, which rose by $150.99 million to $42.41 billion as of the first week of October.
Source: Getty Images
CBN naira exchange rates
- CFA: N2.62
- Yuan/Renminbi: N206.49
- Danish Krone: N230.11
- Euro: N1,718.29
- Yen: N9.80
- Riyal: N391.98
- South African Rand: N85.22
- Swiss Franc: N1,843.13
- Pounds Sterling: N1,976.91
- US Dollar: N1,470.26
- WAUA: N2,008.79
FX inflows rise
The Nigerian currency has continued to appreciate in the official foreign exchange market, as forex inflows from critical sources raised the supply side.
The development also came as Nigeria’s external reserves rose by $70 million to $40.654 billion this week, boosting investor confidence.
Experts say the exchange rate has been stabilised, showing corporate and foreign investors’ confidence in the country’s FX market.
Source: Legit.ng
