Naira Crashes Against Dollar, Worsens Exchange Rate

The Nigerian naira continued its downward spiral against the United States dollar on Thursday.

The Naira dropped to N1,309/$ at the official market and N1,420 at the parallel market.

Currency traders at the bustling Wuse Zone 4 market reported buying the dollar at N1,340 and selling it at N1,420, securing a profit margin of N80.

Malam Yahu Abubakar, speaking over the phone, stated, “We are selling at N1,420 per dollar today and we bought at N1,340. The only reason why the naira is dropping is because of an increased demand for the greenback. The CBN is trying to address the situation but it has not affected the market.”

Abubakar Taura, another trader, expressed wariness in trading due to concerns that the CBN might implement drastic measures to stabilize the dollar. He mentioned, “Yes, the dollar is rising gradually but we are still afraid and trading cautiously because anything can happen and it falls. You would have noticed that the profit margin is high too. We have to recover some of our losses.”

In just two weeks, the naira has depreciated by 26.2%, compared to N1,125 per dollar recorded on April 12, 2023, in the parallel market.

Earlier in the week, the Central Bank of Nigeria allocated $15.83 million to 1,583 BDC operators, aiming to bolster liquidity in the unofficial market. In a letter to BDCs, the CBN announced the allocation of $10,000 to operators nationwide at a rate of N1,021 per US dollar, aiming to stabilize the foreign exchange market and ensure accessibility of foreign currency to eligible end-users.