Dollar Rate Rises In Black Market, Drops In CBN’s Official Market

The Dollar rate in the Investors and Exporters window of the official market increased by N0.91 kobo, indicating the Naira depreciated in value by -0.19 per cent on Thursday, 16 March 2023.

Following trading hours, the drop in the value of the Naira sent the cost of buying one Dollar to N462 in the official market backed by the Central Bank of Nigeria (CBN). 

This is above the foreign exchange rate between both countries’ currencies as of Wednesday, 15 March 2023, which was N461.09/$1. 

Prime Business Africa learnt that at some period during trading, the forex rate had traded as high as N462.11/$1 and as low as N446/$1 on Thursday. 

According to data obtained from the FMDQ Exchange, which tracks the official foreign exchange rate, it was revealed that investors and exporters traded a total foreign exchange worth $97.78 million on Thursday.

This means by the time the forex market closed, the value of the transaction exchanged fell by $44.4 million or -31.2 per cent when compared to the $142.25 million traded on Wednesday. 

In the Bureau De Change window of the black market, the exchange rate between the United States currency and the Naira depreciated to N750/$1 on Friday, 17 March 2023, falling below the N755 to one Dollar. 

Meanwhile, Nigerians are currently struggling with Dollar and Naira scarcity, which has led to the breakdown of trade in Africa’s largest economy. 

Naira became scarce after the central bank embarked on a Naira redesign policy, phasing out the old N200, N500 and N1,000 banknotes on 10 February 2023. 

However, the new banknotes meant to replace them have been scarce as the CBN failed to print sufficient replacement after attempting to mop over N2.7 trillion old notes from the economy.

Despite the Supreme Court voiding the Naira redesign policy on 3 March, and ordering that the old Naira notes remain legal until 31 December this year, both the old and new Naira notes are still scarce. 

The scarcity of the Naira notes is expected to raise demands for Dollars and increase hoarding of the foreign currency.