The naira has hit a record low at the parallel section of the foreign exchange market.
The local currency closed at N1,415 yesterday compared to N1,365 to the greenback exchanged on Wednesday, January 24, 2024, reports Nigerian Tribune.
Currency traders, also known as Bureau de Change (BDC) operators, put the buying rate of the greenback at N1,400 and the selling price at N1,410— leaving a profit margin of N10.
At the official section of the foreign exchange (FX) market, the local currency closed at N900.96/US$ as against N882.24 on Wednesday, from N878.61 on Tuesday.
FMDQ Exchange, a platform that oversees official FX trading in Nigeria, said the naira recorded a high of N1,313 and a low of N700.
Reacting to the development, economic analysts say they expect the naira to remain pressured across FX segments due to CBN’s constrained capacity to significantly boost supply. Some business owners, importers and manufacturers have clearly expressed their concern over the non-availability of FX.
The development comes after Olayemi Cardoso, governor of the Central Bank of (CBN), said the naira is currently undervalued.
According to Cardoso, there are expectations of stability in the foreign exchange market for 2024 that can be attributed to the reduction in petroleum product imports and the recent implementation of a market-determined exchange rate policy by the CBN. This reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage. The resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investment, elevating Nigeria’s appeal to global investors.
“We are implementing a comprehensive strategy to improve liquidity in our FX markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years, “ he stated at a forum on Wednesday.
