Nigeria’s currency – the Naira – sustained its depreciative trend against the US dollar on Friday at the black market, trading at an average rate of N764/$1 and 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) dealers in the Federal Capital Territory (FCT) to the impact of the fuel subsidy removal on businesses but expressed the hope that the fiscal measure would benefit businesses in the medium to long term as government continues to consider the implementation of palliative measures.
Similarly, the Naira significantly 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.
This is even as the local currency depreciated in value 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, based on data sourced from cryptocurrency Peer-to-Peer (P-2-P) Exchange market platform, the Naira slightly 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.
But then, 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.
Specifically, the President charged the Central Bank of Nigeria (CBN) to immediately consider appropriate monetary measures to end the disparities as a strategic step towards improved exchange rate for the Naira and by so doing, create a more conducive environment for business planning and projections.
