The Naira on Monday, September 13, 2021, recorded another all-time low against the US dollar at the close of trading at the parallel market. It’s N550 against $1.
It has never been so terrible for the naira against the US dollar, two other major currencies gained more against naira, one pound was N750 while one euro was N636 at the black market rate. It jumped to NGN557/$1 on September 14.
At the close of business on Friday, September 10, it was N545 against $1, depreciated further at the opening of trading today to N549 before settling at N550 at the time of publication.
The Wide Gap Between CBN Rate and Black Market:
At the official CBN rate, one USD was N410.51, Pounds Sterling was N568.18 while one Euro was N483.66
The wide gap between the official rate at the Central Bank of Nigeria and the parallel market is conspicuously not palatable to the prices of imported products in the country.
Right now, there is N139.49k gap between the parallel market and the CBN rate in the NGN/$
Nigeria is a consumer country as insecurity has completely collapsed the productivity of the Northern-farming region that technically feeds the entire country, sparking hyperinflation on the cost of food items.
$1 May Reach N600 Before The End of 2023
Before July 27, Nigeria’s forex market was operating a multiple foreign exchanges which created a “cartel” for the Bureau De Change operators, there were over 5,000 of them with forex licence that received weekly FX supply from the apex bank.
The CBN stopped the sales of $20,000 to them in an announcement, describing them as saboteurs to the fx policy of the federal government.
The stoppage sparked diverse reactions from FX analysts, while some of them stated that such action would create an FX crisis, some others hailed the decision.
Since then, naira has been recording all-time low and continues to break its own record every day, every week.
For instance, on July 27, $1 was N505 and within a month, specifically on August 27, $1 was N521, which means a backward movement of the naira by another N16.
Between August 27 to September 13, 2021, the USD has gained N29 against the Naira.
Between August 27 to September 13, the Naira dipped further by N45, by this consistent depreciation, the naira is most likely to break another embarrassing all-time low. N600/$1 before the end of 2023 is most likely if FX demand in the black market continues.