Naira breaks record, falls to lowest in both official and parallel markets amid CBN devaluation denials

The Nigerian naira has hit a nine-month record low across all the major markets, extending its losses since President Bola Tinubu mulled a unified exchange rate.

Bloomberg reports that the naira fell by 1% to N471.9 to the dollar on Thursday, June 8, 2023, its biggest fall since December last year.

Investors and economists expect the multiple exchange rates of the naira to merge over time at around N650 to the dollar, but it remains to be seen if the merger has begun.

The naira has fallen since Tinubu said during his inauguration speech in May that the CBN should work to bridge the gap in the official and black market rates.

BusinessDay reports that the black markets in Nigeria can be as comprehensive as 60%.

On Friday, June 9, 2023, the naira traded at N773 per dollar on the black market, confusing traders.

Findings by Legit.ng showed that the scarcity of forex squeezes the naira as CBN auctioned forex at N667 this week.

Ishaya Abdul, a currency trader along the Allen Avenue axis in Lagos, told Legit.ng that the scarcity of the dollar is to blame for the fall in the naira.

“We cannot get the dollar to buy from the banks lower than N600. All the banks sell above N600 to a dollar, and some even sell as high as N670 per dollar,” Abbdul said.

Ofonime Umoh, a tech enthusiast, told Legit.ng that he has been looking for where to buy the dollar for at least N770.

“As I am talking to you, all the currency traders call N773 to a dollar. I quoted lower than the amount to most of my clients. Now I might have to return their money,” he said.

The development follows the CBN’s rebuttal that it has not devalued the Nigerian currency.

However, businesses report that they have been accessing forex above N600 per from the banks, negating the apex bank’s denial.