On Monday, the Nigerian naira plummeted to a historic low of N1,534 against the US dollar on the official Nigerian Autonomous Foreign Exchange Market.
This represents a 3.93 percent decrease or N58 from the N1,476.13/$ rate recorded at the close of trading last week Friday, as reported by FMDQ Exchange, the platform for official foreign exchange trading in the country.
This latest official rate marks the lowest exchange rate since the Central Bank of Nigeria floated the national currency in June 2023. Meanwhile, on the parallel market, the naira was seen trading between N1,480 and N1,490 on Monday, suggesting a trend of higher rates in recent times, particularly following the revision of the methodology used by FMDQ to calculate the official exchange rate.
The adjustment in the methodology led to a significant depreciation of the naira, pushing it from over 900 naira per dollar to over 1,400 naira per dollar. In December, the naira surpassed the N1,000/$ mark on the official window, hitting an all-time low of N1,099.05/$ on December 8, 2023. Subsequent trading days saw further declines, with the naira closing at N1,043.09/$ on December 28, 2023, and N1,035.12/$ on January 3, 2024. By January 9, 2024, it had reached N1,089.51/$ and N1,082.32/$ on January 10, 2024. Another low was recorded on January 30, 2024, at N1,348.63/$ following the FMDQ’s methodology review.
Additionally, bank dollar sales plunged by 56.58 percent to $253.77 million on Friday from a peak of $584.53 million on the first trading day after the CBN mandated banks to sell excess dollars in the official FX market. Commercial banks collectively sold $1.97 billion within the week.
In Abuja, currency traders, known as Bureau De Change operators, quoted the buying rate of the US dollar at N1,480 and the selling price at N1,503, marking a profit margin of N23.