Naira hits N860 at black market, a blow to moves to unify exchange rates

The naira fell to its lowest on the parallel market on Wednesday, trading at 860 to the dollar, and once again widening the gap between the official and parallel markets rates.

The naira closed at 743 per dollar on the official Investors and Exporters window on Tuesday, according to FMDQ.

– Rare parity

The Central Bank of Nigeria on June 13 removed controls and allowed the currency to trade more freely against the dollar in a bid to unify the exchange rate and boost foreign investment — a key aim of the Tinubu administration.

The move drove the naira to a record low of 750 to the dollar on the official market, down from N477.

On June 19, the currency closed at its lowest rate to the dollar since the float, reaching 770.38 at the official market and setting up the first parity with the black market in at least five years.

Since then, the two windows have continued to diverge. The gap reached 14% as low supply of dollars and high demand drive buyers to the parallel market.

Read More

• Naira trades below N810 on official market, weaker than black market
• Naira’s rapid fall prompts CBN intervention
• Naira official rate closes lowest since float

– Learn more

Nigeria has struggled with dollar shortage for years and the International Monetary Fund and the World Bank said the use of multiple exchange rates helped drive away foreign investment.

The country recorded only $468 million as foreign direct investment in 2022, 30% lower than a year earlier, and 90% lower than its receipt in 2008.