Naira has fallen above ₦660/$1 on the black market with a new exchange rate emerging.
Newsone reports that the Nigerian official currency, Naira has fallen massively weeks after a steady rate which saw the Nigerian currency trading at N615 per $1 at the parallel market otherwise known as the black market.
A survey conducted by Newsone Nigeria at the Bureau De Change (BDC) market in Lagos, Nigeria’s commercial city, on Monday evening, July 25, 2022, showed that the naira to USD exchanged at N665/$1, a day after 1 dollar to naira exchanged at N658/$1 and weeks after usd to naira exchanged for N615/$1.
While the speculators were hoping to see a further crash of dollars to naira after the primaries of top political parties in Nigeria, the ruling All Progressives Congress (APC) and the Peoples Democratic Party (PDP), the reverse is the case as the naira trades at N665/$1 at the parallel market otherwise known as the black market as against the N658/$1 it traded yesterday, July 24 and N615/$1 it traded at the beginning of last week. This shows that the Naira lost N50 between Monday, July 18 when the dollar naira traded at N615/$1, and today, Monday, July 25 that the naira to dollar opened at N665/$1.
The local currency opened at N665.00 per $1 at the parallel market otherwise known as the black market today Monday, 25 July 2022, in Lagos Nigeria, after it closed at N658.00 per $1 on Sunday, 24 July 2022.
Newsone Nigeria reports that on the black market, the players buy a dollar for N660 and sell for N665 on Monday morning, July 25, 2022, after they bought N655 and sold for N658 yesterday, Sunday, July 24.
On why there are different rates in the foreign exchange market by the dealers, the President of the Association of Bureau De Change Operators (ABCON), Aminu Gwadebe, who questioned some of the rates being quoted in the market said: ‘’Because the market is a disorganized market as well as the demand too. So what I am telling you is that uncertainty is the cause. It also depends on the market you are taking from. For instance, if you are buying from Abuja, Abuja is not as competitive as Lagos in terms of pricing.”
He also explained the reasons for the difference between the rates in different cities, especially between Abuja and Lagos.
“Most of the time they buy low and sell high. You know environment goes a long way to determine whatever activity is going on there, but we in Lagos, we buy high and sell high, and over there (in Abuja) they buy low and sell high.”
‘’The liquidity here (Lagos) is fine, the demand here is moderately business driven because you have importers and so on. Also if you call in from Abuja, I will give you politician rate and their rates are higher.’’
Meanwhile, Newsone Nigeria reports that this is coming months after the Central Bank of Nigeria (CBN) had on July 27, 2021, suspended foreign exchange (forex) sales to BDC operators and directed all those with a genuine need for forex to revert to banks. The naira lost value at a whooping N85 to the dollar in less than two months from N490/$1 to N575/$1 on September 20, 2021.
Even though the dollar to naira opened at the parallel market (black market) at ₦665 per $1 today, Newsone reports that the Central Bank of Nigeria (CBN) does not recognise the parallel market, otherwise known as the black market. The apex bank has therefore directed anyone who requires forex to approach their bank, insisting that the I&E window is the only known exchange.
The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele in September 2021, described the parallel market otherwise known as the black market as an illegitimate market.
“The only exchange rate remains the I&E window, which is the market we expect everybody who wishes to procure or sell forex to get it,” Emefiele said.
“I am sorry to say that I do not, and I do not intend to recognise any fx in the market.
“Go to your bank. Even if your limit is above what the bank is selling, put it forward, and we will look into it. “If you want to sell the dollar, go to your bank and sell it.”
Emefiele said the apex bank had been investigating the abokiFX website and its owners in the last two years.
“We have been studying the activities of abokiFX in the last two years,” he added. “There was a time we asked our colleagues to call the abokiFX to ask how he conducts the rates.
“He is a Nigerian, living in England, we will track him, Mr Oniwinde, we will track you. “We cannot allow you to continue to kill our economy.”