Naira Plunges Against Euro and Pound After CBN Adjusts Official Exchange Rate
Following the devaluation of the Naira by the Central Bank of Nigeria, the local currency declined against the British Pound and the Euro single currency on the black market.
The Naira lost N4 against the British pound to trade at N562 from the N558 it traded on Wednesday.
This decline continues against European common currency as the Naira lost N1 from N504 exchanged on Wednesday to trade at N505 on Thursday.
On the Investors and Exporters (I&E) Forex window, the Naira lost 0.06 percent or 25 kobo against the US dollar to trade at N386.75 after plunging to as low as N390 during the trading hours.
Activity on the I&E window declined by 86.4 percent from $103.37 million traded previously to $11.96 million as traded are reportedly stay off the market.
The FMDQ Group, who manages the I&E Fx window, on Wednesday adjusted its CBN’s Naira-USD official exchange rate from N361 on Tuesday to N381 despite the central bank maintaining N360/$ on its official website. Indicating that the apex back has officially implemented the N380 but without an official announcement, likely due to backlash — especially after the CBN has repeatedly said the nations have enough reserves to support the economy and blamed speculators and hoarders for the wide exchange of the local currency.
Naira to a Dollar Exchange Rate Dips to N462 at Black Market Amid Social Unrest
Youth Protests Weigh on Naira to a Dollar Exchange Rate on Black Market
The ongoing youth protest in Nigeria continues to weigh on the economic outlook and investors’ sentiment across the board.
The Nigerian Naira to a US dollar exchange rate declined by N1 from N461 on Tuesday to N462 on Wednesday and in the early hours of Thursday at the black market.
Against the British Pounds, the Naira exchanged at N600, down from the N592 it traded on Tuesday. This decline continues against Europe’s common currency as the Naira dipped against the Euro by N2 from N538 to N540 on the black market.
The nationwide protest by the Nigerian youth to curb police brutality and harassment on daily basis continues to disrupt business activities in Africa’s largest economy.
Nigerian youths are saying enough is enough after the death of several youths by the law enforcement agency, Special Anti-Robbery Squad (SARS), that was constituted to curb robbery but gone rogue and made extortions, harassments and in some cases killing of innocent citizens their means of livelihood.
Despite the government disbanding the unit and promise to redeploy officers to other existing units, commands and formations, the youths are saying they want a total discharge of corrupt officers and the entire reform of the Nigerian Police Force (NPF) before they will even consider backing down on the ongoing protest, especially after politicians started sponsoring thugs to attack peaceful protesters in Lagos and Abuja.
The Nigerian Stock Exchange closed flat on Wednesday amid rising uncertainty surrounding the government’s ability to de-escalate the situation given the fact that the youths no longer trust the administration or Nigerian government.
The Naira remained weak against global counterparts and expected to plunge further once the National Bureau of Statistics (NBS) release third-quarter Gross Domestic Product (GDP) report expected by many experts to plunge the nation into its second recession in four years.
Naira Declines on the Black Market on Tuesday
Naira Plunges Against Global Counterparts on Tuesday on the Black Market
The Nigerian Naira declined on Tuesday on the black market despite efforts by the Central Bank of Nigeria to prop up the value of the local currency against global counterparts.
The Naira declined by N4 from N457 per US dollar it traded on Friday to N461 on Tuesday morning. Against the European common currency, the Naira fell by N1 to N538 from N537.
However, the local currency improved by N3 against the British pound from N595 it exchanged on Friday to N592 on Tuesday.
Nigeria’s weak economic outlook continues to weigh on the Naira outlook, especially with the economy projected to enter recession in the third quarter.
Despite efforts to cushion the negative effect of COVID-19 on the nation’s economy, unclear policy path amid weak business sentiment and low foreign revenue generation needed to sustain economic productivity in a majorly import-dependent economy drag on Nigerian Naira value and the entire economic outlook.
Dollar to a Naira Exchange Rate Remains Unchanged on Black Market
Dollar to a Naira Exchange Rate Flat on Black Market on Monday Morning
The US Dollar to a Naira exchange rate remained flat on the black market on Monday morning as businesses and investors’ sentiment surged with an improved economic outlook.
The Dollar to a Naira exchange rate stood at N457 on the black market on Monday morning while the British Pound rate to a Naira was N595, better than the N597 it exchanged on Wednesday.
The Euro to a Naira rate stood at N537 on Monday, a N3 improvement from N540 it sold on Wednesday.
The Naira remained under pressure despite the recent improvement in value following the Central Bank of Nigeria’s decision to lowered the interest rate by 100 basis points to 11.5 percent.
Economic uncertainties as the nation prepared for a second recession in four years weighed on foreign direct investment and continues to drag on growth, especially after the World Bank predicted that the nation’s growth would contract by as much as 4.1 percent in 2020 and only rebound by 0.3 percent in 2021 due to its overexposed to the global oil market.
However, the multilateral financial institution supported President Muhammadu Buhari’s decision to remove oil subsidy and adjust the nation’s electricity tariff to reflect the actual consumption.
Still, it is uncertain if the recent measures by the Federal Government and the Central Bank of Nigeria would be enough to stimulate growth in the real sector of the economy and prop up the Dollar to a Naira exchange rate given the global health crisis.
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