Naira Exchanges at N420 to Dollar

• Naira Exchanges at N420 to Dollar

The Nigerian Naira traded at N420 to a US dollar on the black market as scarcity persists.

The Central Bank of Nigeria had suspended the sales of the US dollar to Bureau de Change Operators in the country in line with their request.

The Association of Bureau de Change Operators of Nigeria (ABCON) had asked the apex bank through a “Letter of recommendation to Declare Market Holiday on Our Weekly Bidding Pending the Reopening of Our Nation’s Borders and the Control of COVID-19.”

This request led to scarcity that eventually increased the value of the US dollar at the black market. Also, the decline in the nation’s foreign reserves used to back Naira’s value weighed on the currency outlook as traders doubt the apex would be able to intervene in the foreign exchange segment as usual.

The nation’s foreign reserves declined from $38 billion in January 2020 to $33.792 billion on April 17, 2020 as foreign revenue generation plunged due to COVID-19 pandemic and the inability of Nigeria to lure oil buyers to over 60 cargoes despite huge discounts.

Therefore, the apex bank may not be able to meet the nation’s dollars demand post-pandemic given the current level of the reserves and the drop in global demand for crude oil.

One of the forex dealers said “Actually for one month now I have been at home. I have not gone to market and there has not been any transaction since then.” Suggesting that only a few traders are operating at the moment.