The exchange rate between the naira and the US dollar has fallen to a record low on the black market, trading at a minimum of N742/$1 on Monday morning.
The naira fell against the US dollar by 1.5 per cent from an average of N731/$1 recorded last week Friday. The depreciation of the naira is due to the increased demand for the dollar amidst continuous shortages.
The rate at N742/$1 is the highest on record, indicating a market differential of N300.62/$1 between the official market and the parallel market.
Also, at the peer-to-peer cryptocurrency exchange, the exchange rate fell to N740.67/$1 against the US dollar on Monday morning from N738.2/$1 recorded last Friday.
The Central Bank of Nigeria (CBN) increased the monetary policy interest rate to 15.5 per cent last month from 14 per cent in a bid to tame the rising inflation in the country, which reached a 17-month high in August 2022, largely due to the global energy crisis and depreciating exchange rate.
Official market trading
The exchange rate at the official Investors and Exporters window closed at N442.5/$1 on Friday, 14th October 2022, an appreciation compared to the closing rate of N450/$1 recorded in the previous year.
A total of $303.03 million in FX value was traded at the official market last week, compared to $379.1 million that exchanged hands in the previous week. The highest daily forex turnover was recorded on Wednesday, 12th October, when a sum of $95.39 million exchanged hands.
The CBN continues to intervene in the official market to manage exchange rate volatility in the market, which has strained the country’s external reserve amidst dollar shortages in the economy.
According to data from the CBN, Nigeria’s foreign reserve has already lost over $2.6 billion year-to-date to stand at $37.91 billion, from over $40 billion recorded as of the end of last year.
