Last Updated on February 2, 2021 by Ope Quadri
The Nigerian Naira now goes for N495 against one US dollar at the parallel market at the close of trading Thursday, November 27, 2020, it’s the worse exchange rate in weeks.
The latest worsening value of Naira/USD comes a few hours after the governor of the Central Bank of Nigeria (CBN) Godwin Emefiele took a swoop on FX analysts whom he said use black market rate for trading analysis, saying the CBN will not succumb to their pressure.
At the time of this report, the CBN rate remains to stabilize at N380 against the US dollar.
What about other currencies against Naira?
The depreciation of the Naira cut across other major currencies across the globe. For instance, the Euro made a gain of 0.9% against the Naira while the British Pounds made a gain of 1.0% against the Nigerian naira (see exchange rate below).
The Canadian dollar also made a whopping 3.7% gain against the naira, NGR/CAD now N365 at the parallel market.
It hasn’t been palatable for the Naira against USD in recent time, some financial analysts say the Naira is overvalued just as the pressure mounts on Nigeria’s currency
NGR has been fluctuating against USD since the start of this week (November 23), when the trading week began on N484/$1, making a slight gain the second day, (November 24) at N483.
On Wednesday, November 25, it took a reserve mode, went for N487/$ at the blackmarket rate.
It was N487/$1 at the opening of business Thursday, November 26, however depreciated further to N495 before the closing of the business, a data monitored on exchange market reveals.
On Wednesday, the CBN governor Emefiele described parallel market as illegal which is mostly patronised by those who he said carry out illicit transactions.
In a rather helpless tone, Emefiele stated, “We don’t agree that the determination of the foreign exchange should be based on a market that is tainted. We will not use this as our benchmark to determine the value of our currency.”
Some analysts said the apex bank boss should take his time to know the reality of things on the streets rather than peg the Naira against the Dollar at unrealistic rate.
To buy USD, CAD, Euro, Pounds, you’d pay more:
Naira vs US Dollar: ₦495/$1 USD
Naira vs Canadian Dollar: N365/1CAD
Naira vs United Arab Emirates Dirham: N150/1AED
Naira vs Euro: N580/1EUR
Naira vs British Pounds: N635/1GBP
Naira vs Ghanaian Cedi: N85/1GHS
In April 2020 when it depreciated to N470, the CBN attributed the fall to the effect of COVID-19 pandemic on forex
But financial analyst said the decline in the price of crude oil and excessive borrowing by the ruling APC government would put more pressure on the local currency.
Does Nigeria have enough reserve to defend the Naira?
The President of Association of Bureaux De Change Operators of Nigeria (ABCON)who always come to the defence of Emefiele and his team a few days ago said the apex bank had enough reserve to defend the naira.
“The CBN has nearly $36 billion foreign reserves to defend the Nigerian Naira,” Alhaji Aminu Gwadabe had said.
But we believe that the naira can regain its value if the CBN consolidate on its measures to bring the lost glory of Nigerian Naira.