Naira experiences biggest fall, trades for N870 per dollar as CBN pegs exchange N770.889 on bebsite

The naira has plummeted to an all-time low of N870 per dollar at the parallel market as the gap between the official and similar markets grows wider.

According to traders who spoke with Legit.ng on Friday, July 21, 2023, more people are chasing the US dollar for summer travel, imports, and school fees.

Legit.ng findings show that the situation is exacerbated by a new regulation by the Central Bank of Nigeria (CBN) requiring that commercial banks and other financial institutions demand Tax Clearance Certificates from FX seekers, forcing Forex seekers to flood the black market in search of dollars.

Analysts say the policy has put pressure on the naira, especially as the Nigerian government began the naira float, which allows dealers, including commercial banks, to use the willing buyer and willing seller model where market forces dictate Forex rates.

However, findings also show that the CBN has adjusted Forex rates on its website Friday, July 21, 2023, a practice the apex is known for.

The CBN has posted the latest FX rates, especially the Investors & Exporters window rates, on its site since 2016.

Still, experts believe it is done to maintain transparency as it no longer determines the rates at which traders buy and sell forex at the official market.

Legit.ng reported that many forex buyers have opted for the parallel black market to access dollars because of the zero documentation required to conclude transactions.

The rush for dollars at the black market comes following implementation of a new forex purchase law requiring buyers to present Tax Clearance Certificates to banks and other authorized dealers.

With most buyers not possessing the required tax clearance certificates to buy at the official Investors and Exporters (I&E) window, the demand has now moved to the black market, where buyers are only required to have cash or make transfers.