- The Nigerian Naira is worth less at both the formal and casual money markets.
- The price difference between these markets is growing, which is not good for the government’s plans.
- New rules about money may make petrol much more expensive.
Lately, the value of the Nigerian Naira has fallen in both the formal market and the casual, or “parallel,” market. This happened on Thursday, July 6, 2023.
The folks who run these markets say that the Naira was trading between N790 and N792 for one US dollar in the casual market.
This situation is not good for the Nigerian government’s plan to bring the formal and casual markets together.
The Naira traded for an average of N792.50 per US dollar at the casual market on Thursday, July 6, 2023.
Some reports say that in parts of Lagos, the largest city in Nigeria, the US dollar was trading for between N790 and N795.
This means the value of the Naira fell in both the formal and casual markets.
The new rate is about 0.94% higher than the N785 per US dollar that was being traded on Wednesday, July 5, 2023.
This means the Naira has lost value compared to the US dollar.
This loss in value happened because many people wanted to buy US dollars for things like imports, travel for business or school, and other reasons.
This loss in value was also felt at the Investors and Exporters (I&E) window, where people were buying and selling freely. D
ata from FMDQ, a market where derivatives are traded, show that the Naira was trading on Wednesday, July 5, 2023, at N742.31 per dollar.
This was much lower than the N768.44 per dollar it was trading at on Tuesday, July 4, 2023.
Experts are worried about the growing price difference between the formal and casual markets.
This is making it hard for the Nigerian government to bring these markets together.
On June 14, 2023, the Central Bank of Nigeria made the formal market and the I&E window the same, to let people buy and sell as they wish.
Because of this change, the official price increased from N463.38 per dollar to the current price of N756.6 per dollar, as set by the Central Bank of Nigeria.
A news outlet called BusinessDay has reported that the formal market has been managed and controlled very tightly for the past six years.
There is also a lack of clear prices and too many different kinds of foreign money markets, which serve different purposes.
A news website called Legit.ng has reported that the Central Bank of Nigeria has made the Naira float, or change in value freely.
This was done to bring together Nigeria’s exchange rate. But, this will force a change in the price of petrol, which the Nigerian National Petroleum Company Limited (NNPCL) currently sells at N488 per litre in Lagos.
Outside Lagos, the price of petrol could rise to N650 per litre. NNPC set a guide price for petrol for its shops, which other sellers quickly followed. This means that new rules about money could make petrol much more expensive soon.