The Naira crashed to one of its all-time low, exchanging at NGN500 for $1 in the black market on Monday, November 30, 2020. The crash of the Nigerian currency followed last week's directive from the Central Bank of Nigeria (CBN), which ordered the Bureau De Change operators to sell a dollar at NGN392.
However, the black market continues to sell at a higher price, offering NGN108 more than the stipulated CBN price. AllNews gathered that a dollar was bought and sold at NGN480/500 as of 11 am on Monday. It was on sale at the same price on Saturday, November 28, 2020.
However, it closed the week market at NGN5 lower than the current price, ending with NGN480/495 on Friday, November 27, 2020. During the same period, a dollar sold for NGN380 by the CBN. The dollar has remained strong against the naira in the black market even after the decision by the CBN to unify the multiple exchange rates in Nigeria.
In a circular by the CBN last week, it was stated that IMTOs sale of dollar to banks at N388 to dollar; banks sale of dollar to CBN at N389 to dollar and CBN sale of dollar to BDCs at N390 to dollar. The BDCs are now expected to sell to end-users at not more than N392 to dollar and each BDC is entitled to buy $10,000 weekly.
Nigeria has three exchange rates, NAFEX, Bank rate and that of the parallel market, however, the CBN recognises only the NAFEX and Bank rates, while the CBN governor, Godwin Emefiele has been critical of the parallel market. He made a move to unify the rates with the circular last week. The rising rate in the black market had led to speculation that naira is becoming weaker as high inflation and recession grip the country.
With the difference in rates, Emefiele said Nigerians should avoid creating panic, "The foreign exchange rate in Nigeria is determined by the forces of supply and demand in the Nigeria Autonomous Foreign Exchange Market (NAFEX) window." adding that, "CBN Governor, Emefiele, insists that the parallel market should not be the basis for determining the value of the Naira." A tweet from CBN a week ago reads.