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Nigeria’s Naira Falls Against Dollar: Causes and Possible Solutions

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Naira to Dollar Exchange- Investors King Rate - Investors King

The Nigerian Naira has been on a steady decline against the US dollar, with a 3.8% decrease in value in the past month alone. This decline has been attributed to a cash crunch in the country and heightened uncertainty.

According to Bismarck Rewane, managing director and CEO of Financial Derivatives Company Limited, the official exchange rate remains overvalued, and sources of foreign exchange remain weak due to sub-optimal oil production, capital flow reversal, and exchange rate premiums at the parallel market.

The exchange rate at the Investors and Exporters (I&E) forex window steadied at N462/$ in January and February, while the official exchange rate remains overvalued compared to N750 recorded at the parallel market. This has made exchange rate management crucial for boosting growth in Nigeria.

However, there is no clear indication from the incoming administration on what exchange rate regime it prefers.

Commenting on the nation’s exchange rate, Chinwe Egwim, chief economist and head of economic research at Coronation Merchant Bank, said it is unclear if president-elect, Bola Ahmed Tinubu’s administration would prefer a floating exchange rate regime, but the manifesto states that “the exchange rate cannot be ignored nor left to the whims of the market”.

She said, “healthy accretion in external reserves should be recorded by the end of 2024 which would support foreign exchange liquidity and give the Central Bank of Nigeria more room to defend the naira.”

Most experts however believed the solution to the falling Naira is to unify the rates at the parallel and official markets as Egypt did in 2016. Although this led to a sharp rise in the inflation rate by 30%, it was complemented by tight monetary and fiscal policies to reduce liquidity build-up, and reserves accrued to $45 billion in 2019.

Others explained that another solution would for the country to up crude oil production in order to improve foreign revenue generation needed to prop up the value of the local currency by meeting demands of the dollar at the official rate.

Investors King reported that Nigeria’s crude oil output stood at 1.3 million barrels per day in February while OPEC’s quota for Africa’s largest producer remains at 1.8 million barrels per day. Indicating that Nigeria is producing 500,000 barrels per day below its quota.

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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Naira

Black Market Dollar to Naira Exchange Rate Today 17th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

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Naira - Investors King

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 17th, 2024 stood at 1 USD to ₦1,540.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,560 and sold it at ₦1,550 on Thursday, May 16th, 2024.

This indicates a slight improvement in the Naira exchange rate 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: ₦1,540
  • Selling Rate: ₦1,530

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

SEC and ABCON Explore Collaboration for ‘Kolectyomoni’ Digital Currency Platform

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security and exchange commission

The Association of Bureaux De Change Operators of Nigeria (ABCON) has initiated talks with the Securities and Exchange Commission (SEC) to explore collaboration on its upcoming digital currency market platform, ‘Kolectyomoni’.

This move was underscored during an official visit by ABCON representatives to the newly appointed Director General of the SEC, Dr. Timi Agama. Aminu Gwadabe, President of ABCON, conveyed the association’s eagerness to engage with SEC to ensure the smooth operation of its digital currency platform.

Gwadabe emphasized that ABCON recognizes the regulatory oversight of SEC in the financial sector and seeks its guidance to navigate the complexities of the digital currency market.

He pointed out that while digital currencies hold immense potential for financial inclusion and innovation, they also present regulatory challenges that require collaborative efforts between industry stakeholders and regulatory bodies.

Highlighting the significance of embracing digital currencies, Gwadabe noted, “The future of BDC’s business is digital currency.”

He stressed the growing adoption of digital currencies among Nigerians, citing statistics that reveal a rising number of participants in the digital currency ecosystem, with a substantial market size of $9 billion annually.

In response, Dr. Timi Agama expressed SEC’s openness to support and facilitate the growth of the digital currency sector in Nigeria.

He acknowledged ABCON’s initiative in launching the ‘Kolectyomoni’ platform and assured of SEC’s cooperation in providing regulatory guidance and oversight.

Agama reaffirmed SEC’s commitment to fostering innovation in the financial sector while ensuring investor protection and market integrity.

He underscored the importance of collaboration between regulators and industry players to develop robust frameworks that foster innovation and safeguard against potential risks.

Furthermore, Agama encouraged ABCON to finalize the development of the ‘Kolectyomoni’ digital currency platform and submit it to the SEC for thorough review and assessment by the technical team.

He emphasized the need for timely regulatory oversight to address emerging trends in the digital currency market and maintain regulatory compliance.

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Naira

Black Market Dollar to Naira Exchange Rate Today 16th May 2024

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

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New Naira Notes

The black market, also known as the parallel market or Aboki fx, US dollar to Nigerian Naira exchange rate as of May 16th, 2024 stood at 1 USD to ₦1,560.

Recent data from Bureau De Change (BDC) reveals that buyers in the Lagos Parallel Market purchased a dollar for ₦1,530 and sold it at ₦1,520 on Wednesday, May 15th, 2024.

This indicates a decline in the Naira exchange rate compared to the current 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: ₦1,560
  • Selling Rate: ₦1,550

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.

Continue Reading
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