Naira drops to record low of N2040/£1 at parallel market

By Sodiq Adelakun

Persistent demand pressures have caused the parallel market exchange rate to hit a record low of N2,040 per Great Britain Pound (GBP), marking a significant decline of 5.39 percent or N110 compared to the previous day’s rate of N1,930.

This unprecedented depreciation is the lowest point in the historical performance of the Naira.

The black-market exchange rates have also witnessed a devaluation of the Nigerian Naira, which has been exacerbated by a substantial surge in inflation reported by the National Bureau of Statistics (NBS) for January 2024.

The inflation rate surged to 29.90 percent, indicating a significant rise from the 28.92 percent recorded in the previous month.

This data reflects a noteworthy uptick in the headline inflation rate for January 2024, with a 0.98 percent increase compared to December 2023 figures.

These developments persist despite the Central Bank of Nigeria’s (CBN) implementation of several policies aimed at bolstering the supply of foreign exchange (forex).

One of the recent policies implemented by the Central Bank o Nigeria (CBN) is the decisin to halt international oil companies (IOCs) operating in Nigeria from immediately remitting 100 percent of their foreign exchange (forex) proceeds to their parent companies abroad.

In a similar vein, the Naira experinced a depreciation agains the dollar in the parallel orex market, where forex is unofficially traded. The exchange rate was quoted at N1,655/$1, indicating a 3.93 percent decrease from the previous day’s rate of N1,590.

Furthermore, the Naira also weakened against the Euo, with a depreciation of 4.09 percent. It closed at N170/EUR1, compared to the previous day’s rate of N1650/EUR1.