In a startling turn of events, the Nigerian naira experienced a significant plunge, reaching a record low of N1,105 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the authorized official market by the Central Bank of Nigeria (CBN). This marked a staggering drop of over N200 from its opening rate of N830 within a matter of hours.
However, the naira demonstrated resilience as it swiftly recovered, closing at 841.14 by the end of the day. Reuters reported that this rapid depreciation brought the official exchange rate remarkably close to parallel market rates, starting at N1,135 and concluding trading at N1,150 to N1,200, as per sources reported by Daily Trust.
Alhaji Hassan Sabo, a Bureau De Change (BDC) operator in Lagos, revealed prevailing rates, stating, “Today we are buying at N1,100 and selling at N1,150.” Despite the recovery, Sabo expressed skepticism about a sustained rate decrease, citing a shortage of available dollars and suggesting a potential increase in the following day’s rates.
Capital market analyst Samuel Showunmi expressed concern over the situation, advocating for the government to reintroduce multiple exchange rates. He emphasized the need to inject more dollars into the market through BDCs, highlighting observed currency racketeering within the banking sector. Showunmi urged corrective measures to address this concerning trend.
In light of these developments, stakeholders are closely monitoring the currency’s stability, emphasizing the importance of comprehensive measures to instill confidence in the market and address the challenges posed by the recent fluctuations.