Experts reveal why the naira fell in the official and black market

• The naira depreciated again in the official window, down to N1,670.49 from N1,631.17 per dollar it traded the previous day
• The naira’s fall comes as CBN plans to increase diaspora remittances to $1 billion monthly
• Financial experts have asked the CBN to increase dollar supplies in the official and parallel foreign exchange markets

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency plummeted against the US dollar for the second day on Thursday, October 29, 2024, after a brief reprieve in the official market, down to N1,675.49 per dollar from N1,631.17 it traded on Wednesday, October 30, 2024.

The naira’s fall comes amid efforts by the Central Bank of Nigeria (CBN) to ramp up diaspora remittances through International Money Transfer Organisations (IMTOs).

The foreign exchange market hit a new low as the naira falls for the second day Credit: Bloomberg/Contributor
Source: Getty Images

CBN boosts monthly dollar inflows

At a recent event in Washington, DC, the apex bank disclosed that FX inflow hit $57 billion monthly in August this year because of its efforts to boost diaspora remittances.

Thursday’s naira depreciation came as dollar supply fell to $166.61 million in the official window.

Data from the FMDQ Exchange shows that willing buyers and willing sellers quoted the dollar at a high of N1,677 to a dollar and a low of N1,610.

Naira falls into the black market

The naira also depreciated in the parallel segment of the foreign exchange market, from N1,725 to N1,730 per dollar.

Currency dealers in the black market said they are facing a dollar supply shortage from the CBN.

Abbas Yishau, a currency dealer in the Ogba axis of Lagos, disclosed that many traders cannot cope with customers’ demand for dollars.

Experts ask CBN to stop the naira from further fall

“You know Christmas is approaching, and many customers rush to buy forex for shopping and imports. That has put pressure on our supplies,” he said.

Economic experts have advised the CBN to intervene in the FX market to forestall the naira from reaching N2,000 per dollar by December.

“The doomsayers have predicted N2,000 per dollar on or before December 2024. And from the way it is going, they might be right.” Janet Ogochukwu, senior banker and economist, said.

She advised the CBN to pump more dollars into the market to stop further local currency depreciation.

New exchange rate as CBN crashes dollars to clear goods

Legit.ng earlier reported that the Central Bank of Nigeria (CBN) has significantly crashed the foreign exchange rate for importers to clear goods from the nation’s air and seaports.

This development comes amid the recent recovery of the local currency, the naira, in the official Nigerian Autonomous Foreign Exchange Market (NAFEM).

Legit.ng earlier reported that the naira appreciated from N1,670 on Monday, October 28, 2024, to N1,650 per dollar on Tuesday, October 29, 2024, due to increased dollar supplies in the FX market.

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Source: Legit.ng