FX: Black Market Currency Traders Reprice Naira to N560
Godwin Emefiele, CBN Governor

FX: Black Market Currency Traders Reprice Naira to N560

Naira struggles to breathe in the parallel black market Tuesday as Nigeria’s local currency hit N56o afternoon.  Some bureau de change, BDCs, operators quoted the local currency at N550, from N550 close on Monday.

The unofficial devaluation will continue until the Central Bank of Nigeria, CBN, flood the Nigerian banks with more dollars with less bureaucracy for companies that want to access the greenback, sources told MarketForces, noting that it is a function and demand and supply.

After the CBN ends weekly supply to bureau de change in what appears to be de-recognition of the FX channel, speculation has increased, some analysts told MarketForces Africa as higher spreads between official and black market rates expand further.

On Tuesday in Apapa, Lagos and Ibadan and Abuja, currencies traders said banks or the central bank cannot meet speedy demand by customers, thus BDCs would remain relevant.

Following the returns of Form M in the banking halls as directed by the apex bank following its closed weekly dollar supply to BDCs, banks have been selling near the Nigerian autonomous exchange rate of N412 with a marginal margin.

But CBN has remained unfazed by this development as the apex bank hinted at investors’ virtual conference that it worries about supply.

Some investment analysts also see the parallel market rate as a true exchange rate position for the Nigerian currency amidst the CBN multi-tiered exchange rate system.

Read Also: Bleak Future for Naira as Foreign Reserves Tumble

In their separate financial statement analysed by MarketForces Africa, companies in the fast-moving consumers’ goods reported foreign exchange losses which reduced their earnings.

FX: Black Market Currency Traders Reprice Naira to N560