The Nigerian Naira continued its downward spiral against the US dollar on Tuesday, reaching a rate of N1,080/$ in the parallel market. This represents a 4.85% decline compared to the N1,030/$ rate observed on Monday.
This marks the second consecutive day of the Naira losing value after it experienced a surge last week when news circulated that the Central Bank of Nigeria was addressing its foreign exchange (FX) backlogs.
Following its closing rate of N950/$ on Friday, the Naira has depreciated by 13.68%, shedding N130 of its value against the dollar. Bureau de Change operators reported trading rates ranging between N1,060/$ and N1,095/$ on Tuesday.
Kadri, one of the operators, stated, “You can sell the dollar for N1,040, and if you want to buy, it’s N1,080.”
Awolu mentioned, “To buy the dollar, it’s N1,095, but if I want to buy from you, I’ll offer N1,070.” Muhammed added, “Selling the dollar is N1,050, and buying it is N1,060.”
On the official market, the Naira depreciated by 7.53% to N869.91/$ on Tuesday, down from N809.02/$ on Monday, as reported by the FMDQ OTC Securities Exchange.
Aminu Gwadabe, the President of the Association of Bureaux De Change Operators of Nigeria, attributed the Naira’s decline to speculators. He explained, “Speculators are always looking at elements of sustainability. Once they sense that the injection is not continuous, they begin to react. It is the reaction of the market we are witnessing. Also, there is resistance. Some people bought at a higher price, which does not favor them. People are not willing to take further losses.”
Meanwhile, the Nigerian presidency has issued a warning to those hoarding foreign currencies, cautioning that new government policies could come as a shock. Dr. Tope Fasua, Special Adviser to the President on Economic Matters, conveyed this message during the “Cowries to Cash” lecture and lunch in Abuja on Tuesday.
Fasua stated that President Ahmed Bola Tinubu’s administration is actively working on policies to strengthen the Naira, and recent government actions in the FX market are expected to continue. He remarked, “For those who are speculating and hoping that the currency’s value will plummet, I believe that the central bank is rolling out policies, and the government will surprise some of them.”