Naira’s Record Low against the Dollar in the Official Market

Key Points 

• The Naira has hit its lowest value against the US dollar in the official market under Tinubu’s leadership.
• The Central Bank of Nigeria (CBN) is now allowing the Naira’s value to change freely.
• Future steps to loosen control of foreign currency are expected from Nigeria.

The Naira, the money of Nigeria, is now worth less against the dollar than ever before in the official market.

This happened while Tinubu is in charge.

A report from GoldenNewsNg on June 22, 2023, tells us that one dollar was worth as much as N815 in the official Investor & Exporter Window. That is the most the dollar has been worth since the window started in 2018.

This is the first time the Naira has been worth so little compared to the dollar in the official market.

This happened after the CBN let the Naira’s value change freely.

This happened under President Bola Ahmed Tinubu’s new leadership.

Just last week, the CBN told banks to stop limiting the price of the Naira in the I&E window.

This let the Naira’s price change freely.

CBN Deputy Governor Kingsley Obiora talked to Bloomberg in Rabat, Morocco.

He said the new policy isn’t a free float but a managed float.

Obiora said it’s too soon to say the Naira’s value is at its lowest.

He also said that Nigeria plans to relax control of foreign currency more in the next few weeks.

This means we can expect more changes to the policy.

Obiora said that the CBN has not been controlling the foreign currency markets since the new policies started.

He let the market decide the price of the Naira.

He also said that no country, not even the United States, lets their currency value change freely.

VoiceofNigeria also reported that the difference between the black market and the official exchange rate got smaller on Wednesday.

The official rate ended at N763/$1. The black market rate was between N760-N770/$1, depending on the buyer or seller.

On the parallel market, or black market, the local currency (abokiFx) started at N772.00 per $1 in Lagos, Nigeria, on June 21, 2023.

This was after closing at N757.00 per $1 the day before.

On June 19th, the official and parallel market rates closed at N770.38. For three days in a row, the exchange rates were the same.

This is seen as an important first step in deciding the price.

There are three main stages in deciding the price.

These are the transition phase, speculation and adjustment phase, and the intervention phase.