The Naira closed its exchange rates with other foreign currencies weak on Friday at the black market, trading at an average rate of N764/$1, which represents a slight decline of 0.13% compared to the N763/$1 it exchanged at during the previous day’s trading session.
Some Bureau De Change (BDC) FX dealers spoken with by our correspondent linked the depreciation of the local currency’s exchange rate against the foreign currencies, particularly the US dollar, to the impact of the fuel subsidy removal on businesses.
The Naira also depreciated by 0.73% against the British Pound Sterling during the trading session on Friday, trading at an average exchange rate of N960/£1 compared to the N953/£1 it traded at the close of the market on Thursday.
Similarly, the local currency lost by 0.62% against the Euro, trading at an average exchange rate of N810/€1 compared to the N805/€1 it exchanged at during the previous day’s trading session.
However, data sourced from cryptocurrency Peer-to-Peer (P-2-P) Exchange market platform reflected that the Naira appreciated by 0.63% appreciation, to trade at a minimum of N760.50/$1 from the N765.36/$1 it traded on Thursday.
The Central Bank of Nigeria (CBN) was supplying FX to the official and unofficial markets over the years as part of its monetary efforts to achieve exchange rate stability for the local currency against other foreign currencies.
However, it discontinued its FX supply to the parallel market early in March 2020 following its findings that some FX dealers were abusing the privilege by engaging in FX round-tripping.
The CBN has not reversed the decision on discontinuation of FX intervention at the unofficial market and analysts believe that this is partly responsible for the huge disparities in the local currency’s FX rate in the official and parallel markets.
However, there are strong indications that the FX exchange rate may soon be over as the new President, Bola Ahmed Tinubu, had in his inaugural address to the nation on Monday, May 29, expressed his desire to discontinue the FX exchange rate disparities.
