Naira Drops To 1,500/$ At The Parallel Market
The free fall of the Naira continued at the parallel market as the United State Dollar exchanged for N1506/$ yesterday from the N1,410 it sold the previous day despite the release of $500 million by the Central Bank of Nigeria (CBN) to various sectors to address the backlog of verified foreign exchange (forex).
The Central Bank of Nigeria (CBN) released $500 million to various sectors to clear the backlog of verified foreign exchange (forex) transactions, but the free fall of the Naira persisted at the parallel market as the US dollar traded for N1506/$ yesterday, down from N1,410 it sold the day before.
Also, the Naira dropped at the official market from N891.90/$ to N1,349 the day before. There was also an intra-high of N1,410 during that window.
Remember that the CBN's announcement in June 2023 about the unification of the foreign exchange market caused the exchange rate to rise from $1/471 to nearly N800/$.
The CBN and the federal ministry of finance have repeatedly promised to address the supply side of foreign exchange, but the naira has lost nearly 200% of its value since the CBN's action in June.
The Finance Minister and Coordinating Minister of the Economy, Wale Edun, stated during a panel discussion at the Nigeria Economic Summit (NES) in October 2023 in Abuja that the government can see foreign exchange inflows into the nation in weeks as opposed to months.
“There is a line of sight of $10 billion worth of foreign exchange in the relatively near future in weeks rather than months.”
He clarified that under forbearance, all cash in the domestic economy can lawfully enter the formal money supply thanks to an executive order signed by President Tinubu.
“Mr President announced that he had taken. measures to ease illiquidity in the forex market which we know is very problematic at this time. The market is illiquid; it's not functioning properly because there is no supply and there are various reasons for that”
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