Naira Hits All-Time Low As 1Dollar Nears ₦1,500 – scarcity hits black market

Nigeria’s currency, the naira, is facing a significant decline, nearing a record low of ₦1,500 against the US dollar due to a severe shortage of dollars in the parallel market. On Tuesday morning (30th, Jan. 2024), the exchange rate dropped to a new low of ₦1,460 per dollar in the parallel market, and traders anticipate further weakening as the dollar shortage worsens.

The naira plummeted to an all-time low of ₦1,348.63 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, marking a 33.87 percent decline compared to the ₦891.90 quoted on Friday, as reported by data from the FMDQ.

The exchange rate had reached an intraday high of ₦1,414.94 per dollar on the same day, coinciding with a 36.68 percent decrease in daily FX market turnover to $64.29 trillion on Monday from $100.97 million recorded on Friday.

Investigations have revealed a significant surge in the demand for dollars due to legitimate needs, creating a challenging environment for importers and travelers who heavily rely on the black market. Importers are experiencing increasing difficulty in securing necessary funds from both the official FX market and the black market.

Read: Dollar to Naira Black Market Exchange Rate Today

According to parallel market rates posted on Tuesday by ₦aira Rates, the dollar was exchanged at ₦1,490.50 per $1 at the black market segment as BDC attributed the sharp fall to scarcity of the foreign currency.

Tue 30 Jan, 2024 • 09:00 AM

💵 1 USD ⇛ ₦1,490.514
💷 1 GBP ⇛ ₦1,855.291
💶 1 EUR ⇛ ₦1,585.719
💶 1 CAD ⇛ ₦1,102.015

v1.1.2

— ₦aira Rates (@naira_rates) January 30, 2024

In a circular released on Monday, the CBN expressed worries about traders providing “incorrect and deceptive information,” such as under-reporting transaction prices, which it stated impacts the exchange rate.

“The intentional effort to create price distortions by submitting false transaction details constitutes market manipulation, which will not be accepted and will now be subject to penalties,” stated the CBN.

The bank also emphasized its dedication to a properly operating and transparent market based on a willing buyer, willing seller framework, with prices quoted and displayed openly.