Lagos, Nigeria – The Nigerian naira has plummeted to an all-time low, with the exchange rate reaching a staggering N983 to the US dollar on the black market, according to quotes received by Nairametrics on Wednesday. Currency traders have cited a severe shortage of dollars as the primary reason for this drastic depreciation.
This alarming rate marks a significant 2.93% drop compared to the previous day’s rate of N955/$1, intensifying the ongoing foreign exchange crisis in Nigeria. It also represents a substantial decline from the N950/$1 exchange rate witnessed just last week, highlighting the Central Bank of Nigeria’s (CBN) challenges in stabilizing the forex market, despite its various policy interventions.
In mid-August, the naira had been quoted as low as N955/$1, raising concerns among investors about the possibility of the exchange rate reaching N1000/$1. However, the rate temporarily appreciated to N840/$1 following the CBN’s warnings to speculators regarding potential significant losses due to anticipated policy changes.
In parallel developments, trading on the official Investors’ and Exporters’ (I&E) window on September 20 recorded an exchange rate settling at N776.60/$1, a decrease from the previous day’s rate of N773.98/$1. The intra-day high reached N799.9/$1, while the intra-day low fell to N720/$1.
Data from the FMDQ Securities Exchange, the platform overseeing official FX trading in Nigeria, indicates that a total of $71.01 million was traded at the I&E window, which represents Nigeria’s official trading window.
The currency tracking platform AbokiFX also reported exchange rate trades at N980/$1 on Wednesday, further underlining the severity of the situation.
A top official from the Association of Bureau De Change Operators of Nigeria (ABCON), speaking anonymously, described the forex market as being in disarray. Many licensed operators, he explained, have been left without dollars to sell, effectively rendering them out of business.
“The market has scattered, the rate is N983/$1. Most of the licensed bureau de change operators do not even have dollars to sell; we are out of business. I think the liquidity is in the so-called parallel market. It’s all about scarcity, and when there is scarcity, it gives rise to the parallel or black market,” he stated.
The official expressed his confusion and concern, acknowledging that even if there were dollars available for transactions, he might not know what to do due to the complex and evolving nature of the market.
He also noted the emergence of different exchange rates, including those from international platforms like Binance and Dubai, indicating the multi-faceted challenges faced by forex traders in Nigeria.