By John Ikani
Naira fell against the US dollar at both the official and unofficial markets on Wednesday, October 26, 2022, slipping to a record low at the unauthorised market amidst continuing scarcity and high demand of the greenback.
The local unit which commenced trading at N440.58 per $1 at the spot market declined to N441.67 per dollar at the close of sales, data published on FMDQ websites, where forex is officially traded, showed.
This implies a 0.07 per cent devaluation from N441.38 it exchanged in the previous session on Monday.
Foreign exchange supply rose to $79.41 million on Tuesday, October 25, 2022, representing 101.2 per cent increase from $39.47 million on Monday.
Similarly, the local unit crashed significantly at the street market on Tuesday, October 25, 2022, parallel market exchange rates reviewed across states showed.
Currency dealers at the Abuja Zone 4 market said the dollar was exchanged at N758.00 on Tuesday as against N755.00 it traded on Monday. It sold at N761.00 and above on Tuesday evening, the traders said.
“It was trading at N760.00 per $1 in the morning, but it dropped to N758.00 for $1 this evening. I don’t know if it will continue to increase or decrease by tomorrow,” currency traders disclosed to newsmen.
What you should know
The depreciation of the local currency at the black market is attributed to increased demand and sustained FX scarcity in the market.
In 2021, the Central Bank of Nigeria (CBN) prohibited the sale of foreign exchange to BDC operators in a bid to arrest the fast fall of the country’s currency.
The apex bank had accused the BDCs of unauthorised sales of foreign exchange above the market they were authorised to serve.
BDC operators were a significant part of the black market before the ban, helping people who couldn’t legally access foreign currencies directly from the CBN to maintain their exchange rates.
Experts say the inability of BDC operators to obtain foreign currency from the CBN could have a significant negative effect on the economy of the nation by increasing pressure on the local currency.
