Last Updated on August 31, 2021 by Ope Quadri
The naira has witnessed its worst exchange rate since Nigeria gained independence in 1960 as 1 USD is valued at N527 on August 31, 2021
On the close of business on August 30, it slides to N527 from N524 (August 27) at the parallel market. It is its all-time low ever
At the official rate from the Central Bank of Nigeria (CBN), 1USD was N410.29 while 1 Pound was N564.6001, even though it’s N715 at the parallel market.
The dismal exchange rate of Naira against Euro, Pounds, USD, and other currencies began to experience its worst rate since the apex bank announced the stoppage of forex to the Bureau De Change operators on July 27, 2021
Though the new fx policy was hailed by some financial experts who expressed optimism that naira would regain its value with time, not without some implications.
The best exchange of naira against the USD since CBN’s new fx policy was N506/USD on August 4 after initially plunging to 525/$1 at the parallel market on July 28.
Godwin Emefiele had on July 27 described BDC operators as saboteurs to the FX policy of the government, saying some of the operators were agents of money laundering.
Why Do Nigerians Buy Dollar from Parallel Market?
The naira can regain its value if the government can concentrate on local production as noted in one of our articles, but the change isn’t going to be an immediate result.
It has to be consistent efforts by the successive governments to continue to support local productions through soft loans and improving security.
At the moment, Nigeria’s economy is dependent on importation even the smallest home appliances are imported.
For small-scale importers, the CBN’s policy puts pressure on the naira because there are some of them who can’t spend more than $100 from the bank via their debit cards.
These categories of people import from Aliexpress, Wish, and major eCommerce websites in America, Europe, and Asia.
The $100 cap by the CBN pushes most of them to patronise the BDC who are the kings of the parallel market. They are found in every major street of Nigerian cities.
Ope is the Head of Content at InfomediaNG. He’s a researcher whose interests cut across real estate investment, stocks, financial technology, and youth empowerment. He’s awesome in Content Marketing and SEO. Favourite Tools: Google Analytics, Canva, UberSuggest