- The Nigerian naira trades at an all-time low of ₦945/$1 on the black market.
- CBN Official Market Rates: Check Here
- A growing difference between the official and street prices is noted.
- Experts suggest measures for the Central Bank to bring stability to the forex market.
Naira’s Unprecedented Drop
Nigeria’s naira is now at its lowest ever, being exchanged for ₦945 for every dollar in the unofficial market. This has been happening for two months, even though the central bank tried to make changes to help.
Banks in Nigeria don’t have enough dollars to give to everyone who wants them. Because of this, many people are turning to the local black market to get dollars. This is making the difference between the price in banks and the price on the street bigger.
For example, on a recent Thursday, FMDQ data showed that the naira was traded for N757 per dollar in banks. But on the street, it was traded for N945 per dollar. This means there is a big difference of N188 between the two prices. This difference is the biggest it’s been since the central bank tried to change things.
Suggestions by Economic Experts
Ayo Teriba, a top person at Economic Associates (EA), believes that the Central Bank of Nigeria (CBN) should treat everyone fairly. He thinks that other money traders, called Bureau De Change operators (BDCs), should be treated the same as banks. He also says that the CBN should think about letting more items be bought with foreign money.
Teriba thinks that the way to make the rates the same is by treating the BDCs like banks and letting people buy more things with foreign money. He says that the CBN shouldn’t keep some people and things out of the official market. If everyone is allowed, then there will only be one rate.
When the Central Bank tried to make only one system for foreign money, it was to make things simple and get more dollars. This change made the bank’s rate drop by 40% at first. It was almost the same as the street rate. But, there aren’t enough dollars for everyone who wants them, so the difference between the two rates is getting bigger again.
Ibrahim Tajudeen, a big economist at ChapelHill Denham, says that the main reason the naira is dropping is that there isn’t enough money moving around. He also says that the difference between the two rates will get even bigger when schools start again. Many people will want dollars to pay for school things in other countries. He believes that the street price of the naira isn’t right because of how the country’s economy is. He thinks the best way to fix it is to bring in more dollars.
|CODE||NAME||BUYING (₦)||CENTRAL (₦)||SELLING (₦)|
|USD||United States Dollar||777.627||778.127||778.627|
|GBP||United Kingdom Pound||992.0188||992.6566||993.2945|
|EUR||Euro member countries||857.6448||858.1963||858.7477|
|XOF||Communaute Financiere Africaine BCE||1.2646||1.2746||1.2846|
|XAF||Communaute Financiere Africaine CFA||1.2646||1.2746||1.2846|
|WAU||WEST AFRICAN UNITS ACOUNTS||1026.2067||1026.8666||1027.5264|
|SAR||Saudi Arabia Riyal||207.2567||207.3899||207.5232|
|XDR||Special Drawing Rights||1040.0761||1040.7449||1041.4136|
|CNY||China Yuan Renminbi||107.8136||107.8829||107.9522|
|ZAR||South Africa Rand||207.2567||207.3899||207.5232|
As you can see from the table, the rate for the US Dollar to Naira can change the rates for other currencies too.