Naira nears N800 per dollar as gap between official and parallel market widens

The naira traded for an average of N792.50 at the unofficial parallel market on Thursday, July 6, 2023. According to reports, in some parts of Lagos, the dollar is quoted at N790 and N795 to a dollar.

The current rate is about 0.94% higher than N785 traded on Wednesday, July 5, 2023, leading to a naira depreciation against the US greenback.

The depreciation was said to be caused by heightened demand for dollars by importers and individuals who want to travel for business, school, and other reasons.

The naira depreciated by 3.52% at the Investors and Exporters (I&E) window as traders embarked on the willing buyer and seller activities.

According to data from FMDQ, the naira was quoted on Wednesday, July 5, 2023, at N742.31, as against N768.44 quoted on Tuesday, July 4, 2023.

Experts are worried that the development is leading to a growing gap between the official and parallel market rates, thereby defeating the unification purposes of the Nigerian government.

On June 14, 2023, the Central Bank of Nigeria collapsed all segments of the official market to the I&E window, reintroducing the willing buyer and willing seller model.

Based on the adjustment, the official rate increased from N463.38 per dollar to the current rate of N756.6, currently quoted by the CBN.

BusinessDay reports that the exchange rate regime was mainly made up of managed and highly regulated official rates for the past six years and a foreign exchange market lacking apparent price discovery and multiple foreign exchange windows serving various purposes.

Legit.ng reported that the naira float introduced by the Central Bank of Nigeria (CBN), aiming to unify Nigeria’s exchange rate, will force a petrol price review, which the Nigerian National Petroleum Company Limited (NNPCL) currently pegged at N488 per litre for its retail outlets in Lagos.

Outside Lagos, the price of petrol is forecasted to sell at N650 per litre. NNPC issued a petrol price guidance for its retail outlets, which other marketers quickly adopted.