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Wednesday, December 6, 2023

Naira Crashes to N970 on Black Market as Dollar Scarcity Bites

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The Nigerian naira fell to a record low of N970/dollar on the black market as shrinking dollar supply from the central bank forced buyers to the street for hard currency.

The naira was changing hands at 970 per dollar on Wednesday, from 962 the previous day and 903 naira at the start of this month.

That’s 20% weaker than the official rate of 776.60 naira per dollar as reported by FMDQ, a Lagos-based platform.

Black market traders said importers were looking for dollars from them to bring in goods for Christmas sales, as they are not getting it at banks.

The naira has been losing ground since June, when the Central Bank of Nigeria allowed it to trade more freely and scrapped the old regime of multiple exchange rates.

But the central bank’s inability to supply dollars to the official trading window has pushed traders back to the unauthorized market. The gap between the official and parallel exchange has steadily widened, since the reforms.

Fixing the currency shortages will be a major challenge for newly appointed new central bank governor Olayemi Cardoso. The former Citibank executive was named to the post last week by President Bola Tinubu

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