Dollar Rate Depreciates In Black Market Amid CBN’s Controversial Naira Policies

The naira gained against the dollar in the black market on Monday but depreciated in the official market on Friday based on exchange rate data obtained from FMDQ.

Prime Business Africa gathered that the exchange rate between the dollar and the naira increased to N451.5/$1 on Friday, indicating traders raise the rate slightly by 0.04 per cent from the N451.33/$1 reported a day before.

During trading at the official market on December 16, 2022, which is the last data released on the foreign exchange session by FMDQ, it was learnt that the exchange rate traded as high as N452/$1, and as low as N439.96/$1 before closing at N451.5/$1. 

However, Naira appreciated in the black market, selling at N746/$1 on Monday, below the exchange rate of N747/$1 the dollar sold for in the Bureau De Change window last week Friday.

CBN’s controversial naira policies affecting dollar rate?

The dollar rate has been impacted by the policies of the Central Bank of Nigeria (CBN) after the apex bank announced redesign of the naira and reduction in cash withdrawal over the counter, at the Auto Teller Machines (ATM) and the Point of Sale (PoS). 

This publication had reported that the President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Aminu Gwadabe, said one of the unintended consequences of the cash withdrawal limit is the return of public rush to substitute their naira to dollar, which is putting pressure on the exchange rate of the local currency before the effective date which is January 9, 2022. 

Recall that the announce of naira redesign had also caused naira dump in the black market according to some Bureau De Change operators. 

Also, the former Deputy Governor of the Central Bank, Kingsley Moghalu, said the CBN’s cash redesign will cause many naira to chase few dollars, increasing the value of the United States currency, while reducing the worth of the Nigerian currency.