Naira falls to new low of N1,590 in black market

The naira on Friday fell to a new low of N1,590 in the parallel market also known as black market following shortage of dollars.

The first time the naira depreciated to this level was on February 16, 2024, according to data compiled from street traders and online data collating platforms.

Compared with the previous day rate, the naira lost N5 as the dollar traded at N1,585 per dollar on Wednesday in the black market.

The Bureau De Change (BDC) operators said they are not getting enough dollars from the commercial banks, which contradicts the directive from the Central Bank of Nigeria (CBN).

The directive had initially permitted BDCs to buy foreign exchange from authorised dealers, with a weekly cap of $25,000.09.

In the official foreign exchange market, known as the Nigerian Foreign Exchange Market (NFEM), the naira depreciated by 0.6 percent or. N9.13 on Thursday as the dollar was quoted at N1,547.81 as against the previous close of N1,538.68, data from the CBN indicated.

Read also: Naira fall continues as market records highest rate of N1,550

Authorised currency dealers quoted the dollar at the highest rate of N1,560 on Thursday lower than N1,550 quoted on Wednesday at the NFEM.

The market recorded the lowest rate of N1,543.09 per dollar on Thursday, lower than N1,532 closed on the previous day.

Against other currencies, the local currency traded steadily at N2,020 per Pound, N1,690/Euro, and N1,150 per Canadian dollar.

Aminu Gwadabe, president of the Association of Bureaux De Change Operators of Nigeria (ABCON) said, the BDCs are constrained on availability, unfavorable offer rates, limited participating banks, lower margins and business uncertainties.

According to him, the combination of all the above factors creates an atmosphere of loss of confidence in the framework for supply, triggering of currency substitution and an awakening of speculative activities and leading to the unfortunate current naira regression from strength to weakness.