Nigeria foreign exchange market is a decentralized or over-the-counter market for the trading of currencies. This includes the value of Nigeria naira to US dollars, Pounds Sterling and other foreign currencies across the World.
Again, Nigeria’s foreign exchange has broken another jinx, on the poor side as the naira falls to an all-time low against the US dollar at the official rate as $1 traded at NGN422.07 at the close of trading.
In July 2021, the Central Bank of Nigeria (CBN) announced that financial institutions that have foreign exchange licence would be in charge of selling forex to eligible Nigerians to meet their foreign exchange needs.
Nigeria is in a dire economic crisis as the country uses 40% of its foreign exchange to import the resources it produces as non of its refineries remain redundant.
The pressure on naira at the parallel market isn’t over as one USD was traded at N575 Wednesday, October 6, 2021 in locations like Allen, Opebi, Isale-Eko, and other parts of Nigeria’s commercial city
You must have heard how politicians and senior government officials in Nigeria, an oil-rich country, fly first-class air tickets to make millions of naira from their travel allowances which are officially known as estacodes.
In 1972, one U.S. dollar to naira was N0.658,meaning the Nigerian currency was strong against the USD and other foreign exchange. Today, the naira is in bad shape. At the time of this update, $1 is valued at N410 at the Central Bank of Nigeria exchange rate.
The Naira doesn’t show any sign of regaining its value against other major foreign currencies soon as it continues to nose-dive at the foreign exchange market.
The naira continues to fall in the foreign exchange market even as abokifx, which was accused by the Central Bank of Nigeria (CBN) of “being responsible” for the bad performance of the naira against major foreign currencies.
On August 31, the Central Bank of Nigeria (CBN) said it discovered some Nigerians who bought forex for Personal Travel Allowance (PTA ) and Business Travel Allowance (BTA) with fake visas at designated banks, a practice that could lead to the blockage of account details of such defaulters or face prosecution.
As the domino effect at the foreign exchange market which is spearheaded by “Lieutenant-General” Godwin Emefiele continues, the apex bank says its boss would not resign.
The depreciation of the Nigerian currency lately calls for worry, from N199/$1 at the time President Muhammadu Buhari and his APC-led government took over to N576/$1 at the time of publication, it would not be economically palatable for Godwin Emefiele, a successful GMD at Zenith Bank and a former finance lecturer, to leave behind a bitter legacy at Nigeria’s apex bank.
Two days after Abokifx suspended black market rate on its foreign exchange tracking website, Naira has depreciated further.
On Monday, September 20, 2021, $1 was N575 in some parts of Lagos, even as Abokifx removed all the updates on its website, following a threat from the Central Bank of Nigeria (CBN) on Friday, September 17, 2021, to shut down the website.
The latest forex middleweight wrestling between the Central Bank of Nigeria (CBN) and abokifx.com isn’t just dramatic but also shows how the inconsistent foreign exchange policies of Nigeria have created a system that benefited some people to the detriment of the Nigerian economy.
The worst is yet to be heard about the value of Naira going by the recent depreciation from NGN521 on September 1 to NGN570 Thursday, September 16, 2021.
The parallel market exchange rate of the US dollar to Naira was N570/N580 at the time of this report on Thursday, September 30, 2021.
The market is still trying to adjust to the policy of the Central Bank of Nigeria on fx sales to BDC operators in Nigeria which took place on Tuesday, July 27, 2021.
When the Naira traded at NGN545/$1 on Friday, September 10, 2021, we thought that was the worst for the Nigerian currency.
But NGN/USD has depreciated even further at the close of trading Tuesday, September 14, 2021, it ended the day at NGN557, corroborating our earlier analysis that the NGN was heading to NGN600/USD.
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.
There are speculations that the Central Bank of Nigeria (CBN) might pounce on foreign currencies in domiciliary accounts and convert such to naira in order to stabilise the foreign market.
The Central Bank of Nigeria (CBN) has vowed to revoke for a year the foreign exchange operating licence of any bank that engage FX malpractices
The apex stated this in a circular entitled, “Observance of due diligence in the processing of foreign exchange transactions” which was signed by its Director of Trade and Exchanges Dr. O.S Nnaji.
It foreign exchange market at the parallel market isn’t palatable for businesses who can not access forex through financial institutions.
At the opening of trading Wednesday it was N532 against one US dollar, but a few minutes later it dropped again to an all-time low, trading at N535 to $1, that’s the lowest value of naira ever.