The Nigerian currency, the naira, experienced a significant downturn, reaching N1,105 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the official market endorsed by the Central Bank of Nigeria (CBN). This marked a substantial decline of over N200 within a few hours, starting the day at N830. However, the currency rebounded and closed at 841.14 by the end of the day.
According to Reuters, this rapid depreciation brought the official exchange rate close to the parallel market rate. In the parallel market, dollars were reported to open at N1,135 and close at N1,150 to N1,200, as indicated by Daily Trust.
Alhaji Hassan Sabo, a Bureau De Change (BDC) operator in Lagos, mentioned, “Today we are buying at N1,100 and selling at N1,150.” When asked about the potential for rate improvement, he expressed skepticism due to the scarcity of dollars, stating, “It cannot come down like that because the dollar is not available, some are not even selling at the rates I just gave you. It might even go up tomorrow.”
Capital market analyst Samuel Showunmi suggested a return to multiple exchange rates to channel dollars into the market through BDCs, highlighting the observed currency racketeering within the banking sector.