Naira Reaches N500/$1 at Black Market

forex Black Market

By Dipo Olowookere

The value of the Naira to the Dollar further nosedived at the black market segment of the foreign exchange (forex) market over the weekend.

According to data harvested from abokiFX, a platform that tracks the exchange rate of the local currency to foreign currencies at the black market, the Naira depreciated by N5 against the greenback on Saturday to sell at N500/$1.

A day earlier, the domestic currency had traded flat against the American currency at N495/$1, but on Saturday, it finally touched the dreadful N500.

The recent steep fall in the value of the Naira started last week after the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele, described the parallel market as a platform that promotes bribery and corruption.

He lambasted analysts quoting the exchange rate from the black market, saying it was wrong because the true exchange rate of the Naira was N379/$1 and not N480/$1.

A day after his outburst on Tuesday after the Monetary Policy Committee (MPC) meeting in Abuja, the Naira started to perform woefully at the black market.

The central bank had said the parallel market only accounts for 5 per cent share of the FX market in the country, though some analysts have disagreed with the bank on this.

This is because most FX users have complained of finding it difficult to access forex through the banks and other authorised forex dealers and the black market is the next place to go.

The CBN mandated dealers not to sell FX to importers of items on the ban list, over 40 of them, forcing them to approach the parallel market.

The central bank operates a multi-exchange rate system with the rates different at the various windows. Apart from the official interbank segment, where the rate stands at N379/$1, there are the Investors and Exporters (I&E) window (the exchange rate is N390/$1) and the Bureaux De Change (BDC) segment (the exchange rate is N386/$).

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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