Naira slumps to N1045/$1 as forex crisis worsens

As growing scarcity of forex bites, Nigeria’s currency, the naira, slumped to N1045/$1 at the parallel foreign exchange market as demand continues to regularly exceed supply.

The British Pound Sterling was bought at N1260 and sold at N1270 while the Euro goes for N1090.

Since the Central Bank of Nigeria (CBN) floated the naira in June with the aim of improving the country’s financials, the local currency has lost more than 40 per cent against the US dollar.

According to forex traders, inflow ranges between N1035-N1045 to the dollar suggesting this was due to increased scarcity, and the situation is now worse because nobody seems to be able to purchase forex even at the official window.

“There is no dollar at the I&E window and no bank is selling. Banks now tell you to fund your account as they no longer issue letters of credit. So it’s all black market for now,” the trader said.

“The scarcity is hard to explain at the moment. The situation is not decreasing. It may worsen if nothing is done. The foreign currency is not available”, he said.

Meanwhile, the official exchange rate continues to trade at N776.8/$1 highlighting the disconnect between what Nigerians are experiencing outside of official channels.

The exchange rate on the parallel market where forex is sold unofficially broke the N1000/$1 benchmark in September in what some analysts thought was temporary.

However, the failure of the government to attract forex inflows has kept the exchange rate spiraling out of control, closing weaker every week.

On the peer-to-peer market where the exchange rate is sold via cryptocurrency, buyers and sellers quoted around N1040/$1.