Parallel Market Offers Unique Exchange Rate of N1100

The exchange rate between the Nigerian Naira and the US Dollar experienced a significant decline, reaching as low as N1,100 on the black market, as reported by select forex traders specializing in inflow transactions. Infostride News obtained quotes from these traders, confirming that exchange rates were hovering between N1,100 to N1,110 for inflow transactions. Inflows in this context refer to forex transactions conducted over the internet or through electronic means.

Furthermore, the exchange rate was also quoted at N1,100 on various peer-to-peer platforms, where exchange rates are facilitated through cryptocurrencies. This decline in exchange rate represents a concerning development, as it reflects the growing disparity between the official exchange rate and the black market rate.

This trend of the weakening Naira is also mirrored in the official Nigerian Forex Market, where it recently reached its lowest point at N848/$1, marking a pivotal moment in Nigeria’s exchange rate crisis. Just a few days ago, Infostride News reported that the official exchange rate devalued to N848/$1 on the official investor and exporter window on October 17th, 2023. Moreover, it had even traded at an all-time high of N981/$1 during intra-day trading.

This recent upheaval in the exchange rate follows the central bank’s decision to lift the ban on 43 items that was imposed during the tenure of Godwin Emefiele as the Governor of the Central Bank of Nigeria (CBN). The central bank had expressed its intention to enhance liquidity in the Nigerian Foreign Exchange Market and intervene periodically. They indicated that these interventions would be gradually reduced as market liquidity improved.

Shortly after lifting the ban on the 43 items, the apex bank released a “FAQ” document, suggesting that the widening disparity between the official and black market exchange rates was attributed to the implementation of these bans back in 2015. The release of this FAQ indicated the central bank’s acknowledgment of the factors contributing to the exchange rate crisis.

The recent closing rate observed on Tuesday, when the official exchange rate reached its lowest point, could potentially signal a new phase in the evolution of the Nigerian forex market. The traders who provided information to Infostride News expressed their concerns regarding the continuous depreciation of the exchange rate. They attributed this depreciation to the mounting demand for foreign exchange and the limited availability of supply in the market.

In summary, the exchange rate between the Naira and the US Dollar has fallen to a new low on the black market, with rates reaching N1,100 for inflow transactions, as reported by select traders. This trend also reflects the growing disparity between the official and black market exchange rates, as the official rate recently devalued to N848/$1. The central bank’s decision to lift the ban on 43 items and their intention to enhance liquidity in the forex market are notable developments in this ongoing situation. However, concerns persist among traders regarding the exchange rate’s continued weakening, largely attributed to increased demand and limited supply.