Naira drops further to N1,510 on black market

Naira on Thursday depreciated further against the US currency, losing N10 on the parallel market, commonly called black market.

The exchange rate closed at N1,510 per dollar, representing 0.66 percent depreciation over the level of N1,500/$1 quoted on Wednesday on the unofficial foreign exchange (FX) market.

Traders attributed the naira weakness to scarcity of dollars and strong demand on the parallel market. “the demand is very, very high. There are dollars but it is not enough to cover the demand,” a street trader said on Thursday.

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The Nigerian foreign exchange market is currently facing increased demand pressures, causing a continuous decline in the value of the naira. Factors contributing to this situation include speculative forex demand, inadequate forex supply due to non-remittance of crude oil earnings to the CBN, increased capital outflows, and excess liquidity from fiscal activities.

“We remain committed to using all the orthodox monetary policy tools available to us to address inflation. We have also embarked on major reforms to liberalise the foreign exchange market, which has enhanced transparency, reduced arbitrage opportunities, promoted stability and improved the liquidity in the market, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN) said on Thursday.

Represented at Vanguard event in Lagos by Blaise Ijebor director of risk, CBN, he said the foreign exchange (FX) inflows recorded in the first quarter (Q1) into Nigeria was 136 percent of the total inflows recorded in 2023.

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“The settlement of all valid FX forwards, which was one of my commitments when I came on as governor of the Central Bank of Nigeria, has also improved the confidence of stakeholders. We are already seeing the result of these reforms in the growth of FX flows into the country,” he said.