The Naira on Tuesday evening November 7, 2023 crashed to N1,020 per dollar, representing 13.3 per cent loss, following strong demand on the parallel market (black market) after the initial few days gain that saw the currency trading at an average of N900 per dollar last week.
After the temporary high witnessed by the Nigerian Naira in the last few days, the currency tumbled against the United States dollar on Tuesday November 7, 2023 by 13.33% falling to N1,020/$ at the parallel market, popularly called the Black Market.
The Naira achieved almost 15% appreciation in the last one week and was selling at N900 as at Friday, 3rd November 2023.
Analysts and Bureau De Change(BDC) operators attributed the naira sudden gain to a couple of government-announced monetary policies, which has put forex speculators into an uncertain and panic mode.
The appreciation comes after the Nigeria’s apex bank signaled paid about a $6.7 billion backlog of matured forward transactions representing about 75% oustanding of such debt.
The announcement by the Central Bank of Nigeria last week Thursday that it cleared the matured foreign-currency contracts for some lenders prompted some speculators to offer their dollars for sale, boosting supply, a BDC operator, Mohammed said.
The backlog was a significant challenge that the central bank has been “battling with in the last three and four years; there is no way this will not prop up the value of the naira,” he said.
This is the first time the naira is losing value since the Central Bank of Nigeria (CBN) began to clear some of its FX backlog last week.
A Forex trader, named Alhaji Adamu who operates in Adeniyi Jones, Ikeja, Lagos told VERY SERIAL that the naira was trading at N1,020 per US dollar. He adds that they bought the greenback at N1,020 and sell at N1,030 leaving a profit margin of N10 per each dollar sold.
Also at the Official market, the Naira lost 4.24 percent of its value against the dollar on Monday. After trading at the Nigerian Autonomous Foreign Exchange Market (NAFEM), on Monday, dollar was quoted at N809.02 as against N776.14 quoted on Friday, data from the FMDQ indicated.
The daily foreign exchange (FX) market turnover declined by 11.30 percent to $87.65 million on Monday from $98.82 million recorded on Friday.
On Thursday and Friday, the Naira had strengthened to an average of N850 to N9000 per dollar on the black market, following some positive sentiments around government plans to shore-up dollar liquidity in the foreign exchange market.
Meanwhile the Presidency has warned forex speculators hoarding dollars and other foreign currencies to halt their economic sabotahe immediately adding forthwith, warning that the policies of the government would shock them.
The Special Adviser to the President on Economic Matters, Dr Tope Fasua, disclosed this at the “Cowries to Cash” lecture and lunch on Tuesday in Abuja.
He disclosed that the President Bola Tinubu’s administration is working on policies that will strengthen the naira.
While positing that the fall in the value of the currency of a country is a sign of conquest, he said, “When you want to destroy a country, destroy its currency first.”
Fasua, representing the Vice President, Kashim Shettima, at the event, added, “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the policies are being rolled out by the Central Bank and the government that I serve, led by the President, will shock some of them.
“You need to listen to the agenda, the man himself (Tinubu) and you will see that the level at which he is thinking is far ahead of most of us.
“You know, he has some very great ideas coming up. Some of them are what you’ve seen reversing the fall in the value of the naira, but he has also challenged us to review forward many of the targets, for example, the idea that Nigeria’s economy will get to a trillion dollars. He wants to achieve it by 2026.
“Some people thought that the naira would continue to lose value. Of course, we can already see what’s going on and who knows, maybe the Naira will strengthen even further to maybe something 500 or 600. I’m beginning to see some of those.”