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Nigeria: Naira Hits All-Time Low At Forex Markets

Naira slipped to an all-time low at the official and unofficial markets on Tuesday to trade N1,482.57 and N1,491.00 respectively

Naira slipped to an all-time low against the United States dollar across forex markets on Tuesday as the Central Bank of Nigeria (CBN) moved to clear dollar backlogs owed to foreign airlines operating in the country.

According to data published by FMDQ, naira closed Tuesday at N1,482.57 per $1 at the official market. The rate represents 10 per cent depreciation from N1,348/$1 the domestic currency traded in the previous session on Monday.

Meanwhile, the local currency also depreciated further at the unauthorised market on Tuesday amidst lingering dollar scarcity and high demand.

According to parallel market rates posted on Tuesday, the dollar was exchanged at N1,491.00 per $1 at the black market segment.

Tue 30 Jan, 2024 Β· 09:00 AM πŸ’΅ 1 USD ⇛ ₦1,490.514πŸ’· 1 GBP ⇛ ₦1,855.291πŸ’Ά 1 EUR ⇛ ₦1,585.719πŸ’Ά 1 CAD ⇛ ₦1,102.015 v1.1.2– ₦aira Rates (@naira_rates) January 30, 2024

This implies that the spread between the official and unofficial window stands at N8.4.

Concerns

In the face of the continuous depreciation of the naira, the CBN has blamed inadequate dollar liquidity for the uncertainty, promising to boost supply and clear the pending backlog of foreign exchange demand.

On Tuesday, the CBN announced that it had cleared all verified dollar backlogs to foreign airlines operating in the country, after injecting an additional $64.44 million into the sector.

The central bank said the latest payment brings the total amount disbursed to the aviation sector to $136.7 million.

In a circular published Monday, the CBN raised concerns over traders reporting “inaccurate and misleading information,” including under-reporting of transaction pricing, which it claimed affects the exchange rate.

“Deliberate attempts to create price distortions by reporting false transaction details amounts to market manipulation which will not be tolerated and will henceforth face sanctions,” the CBN said.

The bank also noted that it is committed to a well-functioning and transparent market that functions on a willing buyer, willing seller basis, with prices quoted and displayed transparently.

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