Naira Plunges At The Black Market To N450 To $1

The naira falls to N450 to $1 on Friday at the parallel segment (black market) of the foreign exchange market against the United States dollar.

Brandnewsday reports that naira is sold for N450 to $1 on Friday compared to its price, N447 against the dollar on Thursday. This was reportedly spurred as some importers hastened to meet the deadline of their foreign exchange payment before the close of the week.

Recall that the Central Bank of Nigeria has halted selling of the U.S dollars to foreign investors and manufacturers seeking to retrieve their funds at the during the oil crisis (oil prices plunge). According to reports from Bloomberg, this was done in a bid to protect the value of the naira.

Naira Falls At Parallel Market

“Remedial policy action was taken by the central bank and increased government borrowing will help contain liquidity pressures,” said Mahmoud Harb, a director at Fitch Ratings.

According to Bloomberg News, twelve-month naira forwards traded at N454.50 per dollar at 11.43 a.m. on Wednesday, down from a high N522.56 to the dollar on April 20. This shows that currency traders are bullish on the naira at the mid-term macro level.

CBN: Nigeria’s Foreign Exchange Reserve

In a similar vein, the latest data released by the CBN is that Nigeria’s foreign exchange reserves presently stands at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020. Consequently, this indicates a sharp gain of $3.15 billion dollars within 36 days.

Meanwhile, benefits of the fundamentals encompassing Nigeria’s major export includes the recent surge in crude oil prices to about $41, seem to have shaped Nigeria’s foreign reserve to rise at such a steady pace.

READ: Naira Appreciates At The I&E Window To N388.84