The Naira Suffers Its Greatest Drop At The Official Window

Exchange rate
The Naira Suffers Its Greatest Drop At The Official Window

Naira touched an all-time low at the official market to trade at N435 per $1 on Thursday and Friday respectively, after the Central Bank of Nigeria (CBN) adjusted the country’s exchange rate on its website to N413.49 to a dollar.

The move by the CBN may indicate another round of devaluation of the currency by the bank.

In May, the apex devalued the naira from N379 to N411.00 per dollar after adopting the Investors and Exporters (I&E) window rate, also known as Nafex rate.

At the close of business on Friday, being the last day of 2021, naira recorded no movement against the U.S. dollar at the official market. It closed at N435.00 to a dollar, the same rate the currency exchanged hands with the greenback on Thursday, data published on FMDQ securities exchange windows where forex is officially traded showed.

This occurred as foreign exchange supply decreased substantially from what was recorded in the previous session Thursday.

The rate is the biggest fall Nigeria’s naira has ever experienced in the official market since February 23. Naira has weakened on a yearly basis for nine years on a stretch, according to Bloomberg data.

The Nafex rate has oscillated between 414 and 415 in the past three months before the sudden fall to 435.

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Naira was devalued by 14.78 per cent at the official window in 2021, recording a significant fall from the N379.00 to a dollar rate quoted on the CBN website at the beginning of the year.

The CBN devalued the currency three times since March 2020 amidst lower oil income putting pressure on the nation’s reserves, and has resisted calls by the International Monetary Fund and the World Bank for a merger of the multiple rates.

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The local unit which opened trading at N420.67 per $1 on Friday reached an intraday high of N400.00 and a low of N445.60 before closing at N435.00 again on the dot.

Forex turnover dipped by 33.90 per cent, with $150.26 million recorded at the close of trade on Friday against the $227.29 million published in the previous session on Thursday.

Currency dealers in Uyo black market exchanged the local currency with the greenback at N560.00 to a dollar and sold at N565.00, while dealers in the street of Abuja, exchanged the naira at N565.00 and sold at N567.00 to a dollar at the close of business on Friday.