The exchange rate between the Naira and the Dollar plunged to a record low N983/$1 at the black market on Wednesday as currency traders said there was no Dollar to sell.
This represents a 2.93% drop when compared with the N955/$1 that it traded the previous day as the foreign exchange crisis in the country continues unabated.
This also shows a substantial depreciation from the N950/$1 that it traded last week as the Central Bank of Nigeria (CBN) appears to continue struggling to stabilize the foreign exchange market despite its various policy pronouncements.
Recall that in mid-August, the dollar was quoted at N955/$1, stoking fears among investors that the exchange rate might plummet to N1000/$1.
This, however, appreciated at some point to N840/$1 after the apex bank warned speculators about potential major losses due to the policies it hopes to introduce.
A top official of the Association of Bureau De Change Operators of Nigeria (ABCON) who did not want to be mentioned told The Explainer that the forex market is currently in disarray as most of the licensed operators do not have dollars to sell and as such are out of business.
He said, ‘’The market has scattered, the rate is N983/$1. Most of the licensed bureau de change operators do not even have dollars to sell, we are out of business. I think the liquidity is in the so-called parallel market is the problem. It is all about scarcity and when there is scarcity, it gives rise to parallel or black market.’’
He said that if there is Dollar available to sell or buy, he might not even do the transaction because he does not know what to do, adding that he is confused as a licensed bureau de change operator.
Going further he said, ‘’You see this market operates on different level, we have started seeing Binance, we are now seeing Dubai rate, we are now seeing local parallel market rate, so it depends on the level you are.’’
It would be recalled that one of the major policies of President Bola Ahmed Tinubu’s government was the decision to float the Naira. The result has been a continuous decline in the value of the currency, contributing to inflationary pressures.