Naira weakens in parallel market, becomes stable in official market as dollar wins

• In the parallel market, the value of the Nigerian naira dropped to a new all-time low of N1,700 to the US dollar
• This occurred amid a fall in the price of crude oil which has risen to over $80 per barrel in recent times
• On the official market, however, the local currency remained stable against the dollar

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Data from Bureau de Change (BDC) operators showed that on October 14, 2024, the Nigerian naira fell to a new record low, ending at N1,700 per dollar in the parallel market.

Naira remialns stable at the official market. Photo Credit: Bloomberg/Contributor
Source: Getty Images

This indicates a 0.29% decrease from its previous rate of N1,695/$1 on October 11th, 2024.

On the Investors and Exporters (I&E) window, however, the naira closed at N1,641.27/$1, remaining comparatively stable despite the parallel market's decline.

But compared to its prior rate of N1,622.57/$1, this still represents a depreciation of 1.14%.

World Bank says CBN on right track

Legit.ng reported that Indermit Gill, the World Bank Vice President and Chief Economist, has supported Central Bank Governor Olayemi Cardoso’s foreign exchange unification policy.

Gill also commended the CBN governor for his approach to managing inflation, pointing out that increasing interest rates by over 800 basic points in the last nine months was the right direction.

Gill made these remarks while speaking at the 30th Nigerian Economic Summit in Abuja on Monday, October 14, 2024.

Under Yemi Cardoso's leadership, the Central Bank of Nigeria's (CBN) Monetary Policy Committee (MPC) has implemented five interest rate hikes.

The first increase raised the benchmark rate from 18.75% to 22.25%, followed by successive hikes to 24.75%, 26.25%, and a 50-basis-point increase to 26.75% in July 2024.

In the black market, it has reached N1,700 to the US dollar, while in the official market, it has consistently hovered around N1,650 per dollar.

CBN issues new directive

Legit.ng reported that the Central Bank of Nigeria has instructed Deposit Money Banks and all other foreign exchange market participants to provide compliance reports for the FX Code by December 31, 2024.

This requirement is part of the CBN's initiative to enhance the integrity and efficiency of Nigeria's foreign exchange market, aiming to meet international standards.

The FX Code, implemented by the CBN on October 14, 2024, establishes a detailed framework of principles to govern the conduct of market participants and promote ethical and professional behaviour in Nigeria's FX market.

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Source: Legit.ng