Naira drops to all-time low on official window, trades at 1348/$

Bisola David
Bisola David
Naira drops to all-time low on official window, trades at 1348/$

The naira hit an all-time low of N1348.63 per dollar on the Nigerian Autonomous Foreign Exchange Market on Monday.

The PUNCH reported that according to data from the FMDQ Securities Exchange, this represents a 51.21 per cent drop from the national currency’s official market closing rate of N891.90/$ last Friday.

The naira had closed above N1000/$ on the official window. On December 8, the naira dropped to an all-time low of N1,099.05 per dollar. On December 28, 2023, it ended at N1043.09/$, followed by N1035.12/$ on January 3, 2024. On January 9, 2024, it closed at N1089.51/$ and N1082.32/$ on January 10, 2024.

Monday’s official exchange rate is the lowest the country has seen since the Central Bank of Nigeria launched the national currency in June 2023.

According to Bureau de Change Operators, the naira fell further to N1,450/$ after the close of business on Monday. On Friday, the naira closed at N1,420/$ in the parallel window.

The naira also suffered in the bitcoin peer-to-peer market, trading at N1,429/$ on Binance’s P2P platform as of the time of this story. According to Chainalysis, a blockchain company, Nigeria has one of the largest peer-to-peer exchange volumes in the world.

With this new rate, the exchange rate difference between the official and parallel markets has shrunk to N101.37. The current slide in the naira comes despite the top bank’s recent payment of $2.5 billion to resolve currency backlogs.

On Monday, the CBN paid $500 million to settle part of its forex commitments. This came after a recent $2 billion payout for the same purpose. The bank is said to still owe $7 billion in FX backlogs.

The apex bank’s spokesperson, Mrs. Hakama Sidi Ali, disclosed the $500 million payment in Abuja on Monday.

Sidi Ali told Nigerians that the CBN is implementing a comprehensive strategy for improvement in the Nigerian foreign exchange markets in the short, medium, and long term.

While announcing some of the CBN’s moves to save the naira, Governor Olayemi Cardoso revealed that the naira is currently undervalued.

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