Naira

CBN May Swiftly Devalue Naira Post-2023 Election

Median estimate is for the expected devaluation to weaken the naira by as much as a fifth, which would take the local currency to N533 per dollar.

Published

1 year ago

November 17, 2022

Osho Adedayo

Latest survey of investors and analysts conducted by globally renowned media outlet, Bloomberg claims the Central Bank of Nigeria (CBN) is likely to devalue the naira after the country’s general elections in February, by the steepest margin in six years to align it with market perceptions.

The news medium on Wednesday 16th of November, 2022, made it known that of the 13 participants in its poll, 11 expected the CBN to devalue the naira after the election, while the remaining 2 predicted that the apex bank would continue with a gradual depreciation of the currency – a process which commenced with the adoption of the more flexible NAFEX – also known as the investors and exporters exchange rate, in 2021.

The report quoted the head of research at SBM Intelligence, Ikemesit Effiong, as saying: “There will be a major devaluation either on President Muhammadu Buhari’s way out or in the first few months of the new administration.”

Median estimate is for the expected devaluation to weaken the naira by as much as a fifth, which would take the local currency to N533 per dollar.

Last month, Bank of America Corp. Economist Tatonga Rusike gave a similar prediction. The median of 10 participants in the Bloomberg poll agreed the fair value of the local unit hovers around 583 per dollar, Investors King understands.

Naira forward contracts are pricing in a depreciation of about one-third over the next year. A markdown between 20 per cent and 33 per cent would be the largest since 2016. The naira has weakened 4.5 per cent against the greenback this year. “A devaluation would likely push up annual inflation that’s at a 17-year high of 21.1 per cent — although it’s already been impacted by the weaker parallel market rate — and cause a one-off increase in the ratio of public debt to gross domestic product,” Mark Bohlund, senior credit research analyst at REDD Intelligence, stated.

According to the Budget Office of the Federation, debt service costs consumed 83 per cent of government revenue in the eight months through Augus. “More materially, the fiscal balance would improve due to the majority of revenue, that is from oil, being dollar-denominated, while expenditure is naira-denominated,” Bohlund added.

Nigeria, priding herself as Africa’s second largest crude producer, after Libya, relies heavily on oil and gas for about 90% of its export revenue. “The scale of the devaluation may be influenced by the winner of presidential election,” said Daniel Sodimu, sub-Saharan Africa analyst at FrontierView, who estimates the naira’s current fair value at N650 against the dollar.

“If a pro-business leader wins the election, then it is likely a devaluation would be sizable enough to make Nigeria’s economy smaller than South Africa’s, using the official rate to convert,” Sodimu said. Such a move would help stop the shortage and rationing of dollars, which have been a drag on business operations in the country and an overall disincentive to invest in Nigeria, he said.

An incumbent party retaining power may see modest changes such as “the current crawling adjustments to the exchange rate will remain, so it will keep Nigeria as the largest economy, on paper,” Sodimu added.

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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

15 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

2 days 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

2 days 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.