Naira down to record low on black market

The Nigerian naira plummeted to an all-time low on the black market on Friday, driven by a surge in demand for dollars from people settling expenses overseas.

Trading at 895 naira to the U.S. dollar, the currency’s value dropped from its previous 875 naira on Thursday, Pluboard learnt from traders in Abuja. “If you are selling it is N885 but if you are buying, it is N895,” said one trader who did not want to be named.

Abokifx, which publishes black market rates of the currency, also reported the same rates in Lagos.

In contrast, the naira maintained a trading rate of 785 naira to the dollar on the official market.

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– 700 to the dollar

Under the new administration of President Bola Tinubu, the central bank has shifted away from the multi-exchange rate system that artificially propped up the naira’s value, moving toward a unified exchange rate.

The currency has lost more than 60% since the measure was implemented.

Wale Edun, who is expected to become Nigeria’s next finance minister, has contested the black market’s weakened rate, suggesting a more reasonable naira exchange rate would be around 700 to the dollar.

While appearing before the Senate on Tuesday as a ministerial nominee, Mr Edun said: “The issue of foreign exchange is clearly uppermost in the minds of the monetary authorities. What I can say is this: For a country that has revenue flows from oil revenues, from remittances, from other non-oil exports, and from financing of over $100 billion a year, there is no reason that there should not be a stable exchange rate,” he said.

“But I would just like to warn that all the models are showing that the fundamental value of the naira should be somewhere around 700. So, a note of caution to the speculators, as liquidity flows in and the rate comes rapidly down, there is a chance that they could lose their shirts, it is just a warning.”