Naira

Bank of America Sees Additional 20% Decline in Naira Value in 2023

Bank of America (BoA) on Tuesday predicted an additional 20% decline in the value of the Nigerian Naira against its global counterparts in 2023.

Published

2 years ago

October 19, 2022

Investors King

One of the world’s leading financial institutions, Bank of America (BoA) on Tuesday predicted an additional 20% decline in the value of the Nigerian Naira against its global counterparts in 2023.

This, the bank attributed the operation of the parallel market. According to Tatonga Rusike, an economist with the Bank of America, the wide exchange rate of the parallel market (black market) would pressure the central bank to adjust its exchange rate to N520 against the United State Dollar, up from the current rate of N436.98.

He said the three indicators which include the widely-used black-market rate, the central bank’s real effective exchange rate, and “our own currency fair value analysis” shows that the naira will weaken further against the dollar in 2023.

“We see scope for it to weaken by an equivalent amount over the next six-nine months, taking it to as high as N520/$,” Rusike stated in a note to clients.

Rusika also noted that Nigeria’s naira will come under increasing pressure “due to limited government external borrowing”. This will drastically reduce the inflow of foreign currency into Nigeria.

Nigeria’s external debt rose to $40.1 billion in August 2022, a level predicted to limit the country’s ability to source for new external borrowings.

Additionally, Nigeria has the obligation to serve its debt which will require more demand for the American dollar. For instance, between January and March 2022, Nigeria spent $694.01 million on debt servicing.

Besides, analysts have expressed concerns about the impact of the 2023 elections on the value of the Naira against the U.S. Dollar. Nigerian politicians have a culture of spending in foreign currency during the election season which often raises the need for dollars.

For instance, during the primary elections conducted at the end of May and early June, the demand for the dollar at both official and black markets rose to a new height as politicians mopped up the greenback for electioneering campaigns.

Investors King had earlier reported that political parties in Nigeria are expected to spend billions in the next year’s elections as INEC officially lifts the ban on political activities.

Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co also buttressed the same sentiment.

He said “what we are seeing is not different; it is something we see every election cycle. Election period often witnessed a high demand for foreign exchange because of the ease in moving election fund”.

Similarly, the Managing Director of Morgan Capital Securities Limited, Rotimi Olubi stated that 2023 general elections will cause Foreign Portfolio Investors (FPIs) to remain on the sidelines.

Due to the uncertainty associated with elections, especially in the African continent, investors often reduce or halt their investment to be on the safer side until after the election.

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Naira

Dollar to Naira Black Market Today, April 19th, 2024

As of April 19th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,100 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

10 hours ago

April 19, 2024

Samed Olukoya

As of April 19th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,100 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,020 and sell it at N1,010 on Thursday, April 18th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate declined slightly when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.

Black Market Dollar to Naira Exchange Rate

Buying Rate: N1,100
Selling Rate: N1,090

Naira

Naira’s Recent Gain Reflects Policy Direction, Says CBN Chief Olayemi Cardoso

Published

1 day ago

April 18, 2024

Samed Olukoya

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has explained that the recent surge in the Naira is a testament to the positive direction of government policies rather than active intervention to defend the currency’s value.

Addressing attendees at the spring meetings of the International Monetary Fund and World Bank in Washington, Governor Cardoso underscored that the CBN’s intention is not to artificially prop up the Naira.

He clarified that the fluctuations observed in the country’s foreign exchange reserves were not aimed at defending the currency but rather aligning with broader economic goals.

Over the past month, the Naira has experienced a notable uptick in value against the dollar, signaling a reversal from previous declines. Data from Bloomberg reveals a 6.4% decrease in liquid reserves since March 18, coinciding with the Naira’s rebound.

Despite this decline, Cardoso pointed out that around $600 million had flowed into the reserves in the past two days, reflecting confidence in the Nigerian market.

Governor Cardoso articulated the CBN’s vision of a market-driven exchange rate system, emphasizing the importance of allowing market forces to determine exchange rates through willing buyers and sellers.

He expressed optimism about a future where the central bank’s intervention in the foreign exchange market would be minimal, except in extraordinary circumstances.

The recent resilience of the Naira follows a period of volatility earlier in the year, marked by a substantial devaluation in January. Since then, the CBN has implemented measures to stabilize the currency, including monetary tightening and initiatives to enhance dollar liquidity.

Cardoso highlighted the transformation in market sentiment, noting that investors now perceive Nigeria’s central bank as committed to stabilizing inflation and fostering economic stability.

As Nigeria continues its journey toward economic recovery and stability, Cardoso’s remarks provide insight into the central bank’s strategy and its impact on the country’s currency dynamics.

Naira

Dollar to Naira Black Market Today, April 18th, 2024

As of April 18th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,020 NGN in the black market, also referred to as the parallel market or Aboki fx.

Published

1 day ago

April 18, 2024

Samed Olukoya

As of April 18th, 2024, the exchange rate for the US dollar to the Nigerian Naira stands at 1 USD to 1,020 NGN in the black market, also referred to as the parallel market or Aboki fx.

For those engaging in currency transactions in the Lagos Parallel Market (Black Market), buyers purchase a dollar for N1,050 and sell it at N1,040 on Wednesday, April 17th, 2024 based on information from Bureau De Change (BDC).

Meaning, the Naira exchange rate improved when compared to today’s rate below.

This black market rate signifies the value at which individuals can trade their dollars for Naira outside the official or regulated exchange channels.

Investors and participants closely monitor these parallel market rates for a more immediate reflection of currency dynamics.

How Much is Dollar to Naira Today in the Black Market?

Kindly be aware that the Central Bank of Nigeria (CBN) does not acknowledge the existence of the parallel market, commonly referred to as the black market.

The CBN has advised individuals seeking to participate in Forex transactions to utilize official banking channels.