Exchange Rate Falls To A Record Low Of N2040/1 At The Black Market

The exchange rate hits a record low of N1,712/$1 on the black market and N2040/£1

On February 19, 2024, the Naira sharply declined versus the US dollar, peaking at N1,712 within the same day.

According to data from the NAFEM, where forex is officially traded, the local currency fell by 3.78% to close at N1,598.54 to a dollar at the close of business.

The ongoing demand pressures that keep devaluing the currency have caused the parallel market exchange rate to drastically drop, reaching a record low of N2040 per Great Britain Pound (GBP).

This is a significant drop from the N1,930 rate the day before by 5.39%, or N110.

This depreciation marks the lowest point in the Naira's historical performance and is an unprecedented occurrence.

Read: $1 Falls To N1,700, And N2,100 Is Now The Value Of A Pound Sterling

According to the National Bureau of Statistics (NBS) for January 2024, at the same time, the devaluation of the Nigerian Naira has persisted in black-market exchange rates, which has been made worse by a significant increase in inflation.

The rate of inflation increased to 29.90%, a notable increase from the 28.92% that was noted in the preceding month.

The headline inflation rate for January 2024 increased by 0.98% when compared to December 2023, according to this data, which is a notable increase.

The Central Bank of Nigeria (CBN) has implemented various policies with the objective of increasing the availability of foreign exchange (forex), but these developments continue.

The announcement by the CBN to stop international oil companies (10Cs) operating in Nigeria from immediately sending 100% of their foreign exchange earnings to their parent companies overseas was one of the most recent policies.

Similarly, in the unofficial parallel forex market, where the Naira was quoted at N1,655/$1, down 3.93% from the closing rate of N1,590 the day before, the Naira lost value relative to the US dollar.

The Naira also lost 4.09% of its strength against the Euro, closing at N1720/EUR1 as opposed to N1650/EUR1 the day before.