Emmanuel OchayiThe naira’s value against the dollar took a hit at the start of the week, with exchange rates opening at N1,200/$1 on peer-to-peer (P2P) platforms. As demand pressures for the US dollar persist and supply remains limited, the naira’s woes continue.
The day began with quotes at approximately N1,200/$1, but as noon approached, sellers were quoting rates as high as N1,210/$1.
The situation on the black market isn’t any better, with unofficial reports suggesting that cash trades are hovering around N1,200/$1, while “inflows” or wired transfers are fetching rates between N1,250 and N1,300.
The freefall of the naira in the unofficial market has been exacerbated by the removal of currency restrictions on the official market. These restrictions had previously propped up the naira’s value.
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The central bank has announced plans to intervene in the foreign exchange market to bolster liquidity, following the lifting of an eight-year ban on certain items accessing dollars on the official market.
Last month, the naira had already surpassed the 1,000 naira per dollar mark on the black market. This continued devaluation is largely driven by the overflow of excess dollar demand from the official market into the informal market.
It’s important to note that actual exchange rates may vary, depending on the buyer or seller involved. The naira’s continued decline is causing concerns among traders and the general population alike, as they navigate the challenging economic landscape.
Details later…
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