The naira/dollar exchange rate has fallen to N888/$1 on the cryptocurrency market, Binance.
Currency limitations have previously been noted as a significant barrier for international companies wishing to engage in Nigeria, the continent’s top oil producer.
Despite the fact that the CBN’s decision to loosen the currency peg was made to address this problem, the demand for dollars has not been able to be met.
As a result, firms are now purchasing foreign currency through unofficial sources, undercutting the CBN’s efforts to close the gap between official and black market rates.
The CBN initially intended to permit free trading up until the currency reached levels that were relevant to the market. However, market interventions have been required to stop significant currency losses due to worries about future inflation brought on by declining exchange rates.
Thus, the naira’s devaluation by N98 yesterday has widened the difference with the official rate and made the situation worse.
The synchronisation of various exchange rates was expected to have a positive effect on the federal budget and close the arbitrage difference between the official and parallel market rates, according to market analysts. This, however, has not been the case.
