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Naira Exchanges at N570 to a Dollar As Demand Outweighs Supply

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Naira to Dollar Exchange- Investors King Rate - Investors King
  • Naira Exchanges at N570 to a Dollar As Demand Outweighs Supply

The Nigerian Naira posted its biggest decline on Thursday as price differential on five-year naira futures expanded by N156 or 27 percent from N413.36 to close at N569.69 in the Fx Non-Deliverable Forward market.

According to traders interviewed by Reuters, while the Central Bank of Nigeria (CBN) had weakened the local currency by N73 on average across tenors, the five-year Naira futures weakened to 569.69 as investors doubted the apex bank’s ability to support the currency given weak foreign reserves and low oil prices.

The Central Bank of Nigeria had devalued the Nigerian Naira following plunged in oil demand, oil prices and foreign reserves due to COVID-19 pandemic. The currency was technically devalued to slow down surged in capital flight that trailed global lockdown amid an increase in global risk, especially in emerging markets usually associated with weak fiscal buffers.

The three months Non-Deliverable Naira contract expected to expire on July 29, 2020 declined by N5.47 from N389.65 to N395.12 as shown below.NDFThe depreciation is as a result of weak dollar liquidity and the increase in demand for the US dollar by foreign investors looking to move their funds out of the country.

Investors King reported earlier today that foreign investors pulled out N186.6 billion in the first quarter of the year, up from N124.24 billion in the first quarter of 2019.

The uncertainty surrounding Nigeria’s economic outlook given the nation’s weak fiscal buffer, rising debt profile, weak foreign reserves and high unemployment of 23.1 percent remains investors’ concern post-pandemic.

With the local currency trading at N570 to a US dollar, it is likely the central bank will devalue the Naira once again to ease pressure on the foreign reserves.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Black Market Dollar (USD) to Naira (NGN) Exchange Rate Today 25th July 2024

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Naira Exchange Rates - Investors King

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of July 25th, 2024 stood at 1 USD to ā‚¦1,595.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ā‚¦1,580 and sold it at ā‚¦1,570 on Wednesday, July 24th, 2024.

This indicates a decline in the Naira exchange rate value when compared to today’s rate.

The black market rate plays a crucial role for investors and participants, offering a real-time reflection of currency dynamics outside official or regulated exchange channels.

Monitoring these rates provides insights into the immediate value of the Naira against the dollar, guiding decision-making processes for individuals and businesses alike.

It’s important to note that while the black market offers valuable insights, the Central Bank of Nigeria (CBN) does not officially recognize its existence.

The CBN advises individuals engaging in forex transactions to utilize official banking channels, emphasizing the importance of compliance with regulatory frameworks.

How much is dollar to naira today in the black market

For those navigating the currency exchange landscape, here are the latest figures for the black market exchange rate:

  • Buying Rate: ā‚¦1,595
  • Selling Rate: ā‚¦1,585

As economic conditions continue to evolve, staying informed about currency exchange rates empowers individuals to make informed financial decisions. While the black market provides immediate insights, adherence to regulatory guidelines ensures stability and transparency in forex transactions.

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Forex

IMTOs Drive 38.86% Rise in Foreign Exchange Inflows to $1.07bn in First Quarter of 2024

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Naira Exchange Rates - Investors King

Foreign exchange inflows into Nigeria surged by 38.86% to $1.07 billion in the first quarter of 2024, according to the Central Bank of Nigeriaā€™s (CBN) latest quarterly statistical bulletin.

This increase is attributed to the enhanced contributions from International Money Transfer Operators (IMTOs).

In January, IMTOs facilitated inflows amounting to $383.04 million. This figure dipped slightly to $322.83 million in February but rebounded to $363.70 million by March, this upward trend represents a 10.74% growth from the previous quarter of 2023.

The surge in forex inflows comes at a critical time for Nigeria, as the country continues to grapple with economic challenges, including inflation and a fluctuating naira.

The increased foreign exchange reserves are expected to provide much-needed stability to the naira and bolster Nigeriaā€™s economic standing in the global arena.

CBN Governor Dr. Olayemi Cardoso has underscored the importance of remittances from the diaspora, which constitute approximately 6% of Nigeria’s GDP.

The recent approval of licenses for 14 new IMTOs is seen as a strategic move to enhance competition and lower transaction costs, thereby encouraging more remittances to flow through formal channels.

“We recognize the significant role that IMTOs play in our foreign exchange ecosystem,” Dr. Cardoso remarked during a recent press briefing.

“The inflows weā€™ve seen are a testament to the effectiveness of our strategy to engage with these operators and ensure that more remittances are channeled through official avenues.”

The CBN has also introduced measures to facilitate IMTOs’ access to naira liquidity at the official window, aiming to streamline the settlement of diaspora remittances.

This initiative is part of the broader effort to stabilize the forex market and address the persistent challenges of foreign currency availability.

The bulletin also revealed that the inflow from IMTOs has contributed significantly to Nigeriaā€™s overall forex reserves, which are crucial for economic stability and growth.

Analysts suggest that the increased remittances will support the naira, providing relief amidst the countryā€™s ongoing economic adjustments.

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CBN Resumes Forex Sales as Naira Hits N1,570/$ at Parallel Market

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US Dollar - Investorsking.com

The Central Bank of Nigeria (CBN) has resumed the sale of foreign exchange to eligible Bureau De Change (BDC) operators.

The decision was after Naira dipped to N1,570 per dollar in the parallel market,

CBN announced that it would sell dollars to BDCs at a rate of N1,450 per dollar. This decision aims to address distortions in the retail end of the forex market and support the demand for invisible transactions.

Following the CBN’s intervention, the dollar, which recently traded as low as 1,640 per dollar, has shown signs of stabilization.

The apex bank’s action is expected to inject liquidity and restore confidence among market participants.

BDC operators have welcomed the move. Mohammed Magaji, an operator in Abuja, noted that the dollar was selling at 1,630 per dollar.

He emphasized the market’s volatile nature but expressed optimism about the CBN’s intervention.

Aminu Gwadebe, President of the Association of Bureau de Change Operators of Nigeria, attributed the naira’s decline to acute shortages, speculative activities, and increased demand due to recent duty waivers.

He praised the CBN’s action as a necessary step to alleviate market pressures.

The CBN’s efforts include selling $20,000 to each eligible BDC, with a directive to limit profit margins to 1.5% above the purchase rate.

This strategy aims to ensure that end-users receive fair rates and to curb inflationary pressures.

The CBN’s ongoing reforms seek to achieve a market-determined exchange rate for the naira. As the naira continues to navigate turbulent waters, stakeholders remain hopeful that these measures will lead to a more stable and liquid forex market.

Market analysts suggest that sustained interventions and increased access to foreign exchange could help reverse the naira’s downward trend.

The CBN’s actions demonstrate a commitment to tackling the challenges facing the foreign exchange market and supporting Nigeria’s economic stability.

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