BUSINESS
Dollar to Naira News Update 2023 – Today Rates Nearing ₦1000
Have you been following the economic news lately? If so, you may have noticed a rather staggering trend: the exchange rate between the dollar and the Naira. As we stride into 2023, the dollar to Naira rate is inching its way towards a momentous milestone – ₦1000. Quite a number, isn’t it? But what does this mean for you, the consumer, the business owner, the investor? Let’s delve into it, shall we?
“The exchange rate between the Dollar and the Naira is not just a number. It’s the pulse of the economy, a barometer of a nation’s economic health and global standing. When the rates rise, the tremors can be felt far and wide.”
It’s important to understand the factors influencing this trend. Why is it happening, and what are the potential implications? Let’s break down the key contributors:
- Global oil prices: Nigeria is a major oil-exporting country and changes in global oil prices can have a significant impact on the nation’s economy and by extension, the Naira.
- Foreign Direct Investment (FDI): FDI plays a central role in strengthening the national currency. Recently, however, Nigeria has seen a decrease in FDI, leading to a weaker Naira.
- Economic policies: Government policies, especially those related to foreign trade and currency controls, can also influence the value of the Naira.
Now, with these factors at play, what might be the potential impact of the dollar to Naira rate nearing ₦1000? How would this affect the economy, imports, exports, and everyday transactions? Stick with us as we delve deeper into the implications of this looming economic scenario.
A Snapshot of Current Exchange Rates
Black Market Dynamics
As of September 9, 2023, the black market, also recognized as the parallel market, showcases a troubling picture. The Naira stands at ₦929 against the dollar if you are buying, and ₦920 if you are selling. This is a slight dip compared to the previous day’s figures, which stood at ₦932.
Insights from the Central Bank
Parallelly, the official exchange rate, as dictated by the Central Bank, has seen an uptick, settling at ₦789 on September 8, 2023, a rise from the ₦784 noted in the previous trading session. Projections suggest a further rise to ₦795 in the coming quarter, with a possibility of hitting ₦926 in a year. To put this in perspective, July 2023 witnessed an all-time high of ₦799.
A Brief Recap: The Fluctuations Over the Past Week
- September 8, 2023: Buy: 932, Sell: 920
- September 7, 2023: Buy: 930, Sell: 920
- September 6, 2023: Buy: 931, Sell: 915
- September 5, 2023: Buy: 925, Sell: 915
- September 4, 2023: Buy: 925, Sell: 912
- September 3, 2023: Buy: 918, Sell: 915
- September 2, 2023: Buy: 920, Sell: 906
As we step into the new week, the Naira seems to be grappling with a downward trend, particularly in the parallel market. On Friday, it was reported that the Naira fell to an alarming rate of N930 per US dollar. This event marks a substantial 0.32% decline from its position on the preceding day, Thursday, where it was trading at N927 to the dollar.
It is critical to note the different rates in various market windows:
- I&E FX Window: Here, the Naira commenced the day at N767.83 per dollar but deteriorated further to settle at N736.62 per dollar by the day’s end.
- Parallel Market: In this market segment, the Naira depreciated by 0.32% on September 8, 2023, concluding the trading session at N930 per dollar, a dip from N927 per dollar the previous day.
Furthermore, it’s worth highlighting that the Naira also witnessed a downward trend against the British pound, depreciating by 0.85% to N1190 per pound, down from N1180 per pound on Thursday.
An Insight Into the Current Trends
The parallel market has been witnessing a consistent decline in the value of Naira throughout the week. This downward trajectory is attributed to the incessant demand for foreign exchange (Fx), which vastly surpasses the limited supply available in the market. Let us scrutinize the data more closely:
Data Breakdown
- Opening Rates: At the opening of the market, the rates stood at N767.83 per US dollar and N1180 per British pound.
- Closing Rates: The market closed with the Naira at N736.62 per US dollar and N1190 per British pound.
- Weekly Trends: Over the week, there has been a noticeable decline in the value of the Naira against major foreign currencies in the parallel market.
Central Bank’s Response
In light of the escalating challenges in the foreign exchange market, the Central Bank of Nigeria (CBN) is formulating strategies to navigate through this period of economic strain. The acting Governor of the CBN, Folashodun Shonubi, revealed that the bank is working tirelessly with commercial banks to clear the staggering $10 billion foreign exchange backlog within the forthcoming two weeks.
Shonubi emphasized that this daunting task would be tackled through various structures established within the forex market. He added that the commercial banks, which are responsible for handling a whopping 75% of the forex transactions, will be pivotal in ensuring the backlog is cleared efficiently and expediently.
