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Naira Falls To Record Low, Exchanges At N1,421 Per $1 In Parallel Market

VerseNews understands that this rate surpassed the parallel market rate of around ₦1,400.

Published

2 years ago

January 29, 2024

VerseNews

Naira - Dollar Exchange Rate

Nigeria’s official currency, the naira, reached an all-time low against the dollar, dropping to ₦1,421 per dollar during trading on Friday, as reported by FMDQ Exchange.

VerseNews understands that this rate surpassed the parallel market rate of around ₦1,400.

Despite Central Bank Governor Olayemi Cardoso’s announcement of efforts to improve liquidity in the foreign exchange market, the naira closed at ₦891.90 on the official market.

Analysts, including Kyle Chapman from Ballinger & Co., express concern that the declining naira could deter investors, deepening the risk premium.

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“The downwards spiral is becoming self-perpetuating at this point. The further it falls, the less investors want to enter Nigeria, and the deeper the risk premium embedded into the naira rate,” Chapman said.

The central bank’s delay in clearing outstanding amounts in forward deals contributes to the official rate approaching the parallel market level.

This economic situation is compounded by the recent suspension of Toyota subsidiary Daihatsu for failing to conduct proper vehicle safety tests for decades.