The value of the Nigerian naira plunged to a new record low on Thursday morning, trading at a minimum of N730 to $1, down 0.69% from the previous day.
According to the black market vendors who were questioned on Thursday, this is the new development.
The decline, in the opinion of the traders, might be related to the market’s rising demand and ongoing forex shortage.
The move by the central bank to boost the interest rate to a 20-year high of 15.5%, or 150 basis points more than the 14% declared at the previous MPC meeting, was followed by a decline in the currency rate.
The exchange rate of N730 to $1 is the highest on record, and traders have informed Nairametrics Research that they typically sell dollars for up to N735 to $1 and purchase them for between N725 and N730.
The naira has been in free slide since the CBN stopped selling foreign exchange to Bureau De Change operators exactly 14 months ago, and market liquidity has been tightening ever since. According to Nairalytics’ statistics, the currency rate was trading at N518/$1 before the embargo and has declined by a factor of N212/$1 in just over a year.
Similar to this, on Thursday morning at the peer-to-peer cryptocurrency market, the exchange rate decreased to N735/$1 against the US dollar from N733.4/$1 seen in the previous session.
On Wednesday, September 28, 2022, the official Investors and Exporters window’s closing exchange rate was N436.37 to $1, a minor decline of 0.01% from the previous day’s closing rate of N436.33 to $1.
The official market saw FX transactions of $119.49 million on Wednesday, a 20.17% increase from the $99.43 million that changed hands on Tuesday.
A total of $297.02 million has been exchanged in the official market so far this week, moving closer to the $524.35 million that was transacted the week before. Through consistent intervention, the Central Bank has been able to keep the currency stable in the official market, boosting the nation’s foreign exchange reserves.
Nigeria’s foreign reserve, which was over $40 billion at the end of last year 2021, is now down over $2 billion year-to-date, according to figures from the CBN, and is now at $38.36 billion.