BREAKING: Giant Naira Crashes As Dollar Stands Twice As Tall

Nigeria Naira has crashed further with utmost disregard to the US Dollar across Foreign Exchange Markets as businesses resume after public holidays.

Brandnewsday understands that the Forex turnover soared by 31.2%, as the Naira’s exchange rate at the NAFEX window declined against the dollar closing at N393.50/$1 during intra-day trading on Tuesday, December 29, 2020.

Moving further, the local currency depreciated against the dollar — closing at N470/$1 at the parallel market popularly known as Black Market Tuesday, December 29, 2020. Consequently, as several businesses resume activities after the Christmas holidays declared by the Federal Government.

According to information from Abokifx – a prominent FX tracking website, at the parallel where forex is traded unofficially, the Naira depreciated against the Dollar to close at N470/$1 on Tuesday – a N5 drop when compared with the N465/$1 that it exchanged for on Thursday, December 24.

Naira gained about 7.8% within one week in September at the black market, as the Central Bank of Nigeria (CBN) launched some measures targeted at exporters and importers.

The efforts made by the Nigerian apex bank is aimed at boosting the supply of dollars in the foreign exchange market and reduce the high demand for forex by traders.

Recall that Brand News Day had reported that Naira has been strengthened against the past one week against the dollar and other key currencies over less demand by traders.

Unfortunately, Naira gains appear to have been completely useless as a result of the recent crash of the naira exchange rate to the dollar.

Naira to Dollar News Today

Imperatively, in an effort to stabilize the forex market, the CBN sold over $1 billion to BDCs since the resumption of the forex sales on Monday, September 7, 2020.

This was expected to inject more liquidity into the retail end of the foreign exchange market and discourage hoarding and speculation.

READ: Naira Maintains Stability, Gains N43 In One Week Despite Wide Exchange Rate

However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.

Observation

• The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand, and a shaky economy that has been hit by the coronavirus pandemic.
• The Naira depreciated against the dollar at the Investors and Exporters (I&E) window on Tuesday, closing at N393.50/$1.
• Despite the CBN’s intervention, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.