Naira value to Dollar plunges by 51.95% amid foreign reserves decline

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The value of Nigeria’s naira to the dollar fell from 196.99 in December 2015 to 410 in April 2021, reflecting a 51.95 per cent decline despite the various foreign exchange policies introduced by the Central Bank of Nigeria to strengthen the currency.

According to a monthly document obtained from the CBN’s website, the value of naira at the inter-bank forex market stood at N196.99 as of December 2015.

The reserves fell by $222.3 million between May 31 and June 10 to $34.0 billion, according to figures published by the Central Bank of Nigeria. The last time it fell below that mark was between June and July of 2017.

Data posted on abokiFX.com, a website that collates parallel market rates in Lagos showed, Naira closed at N505.00 at the black market, a N 3.00 or 0.60 per cent fall from N502.00 it traded since June 4.

The naira also fell against the U.S. dollar at the official Investors and Exporters (I&E) window on Tuesday.

The CBN, which operates a managed float, periodically supports the currency using the reserves, and a lower reserve is expected to affect the currency.

Data posted on the FMDQ Security Exchange where forex is officially traded showed that the naira closed at N411.75 per $1 at the Nafex window

The performance on Tuesday represents a N0.95 or 0.23 per cent decrease from N410.80 the rate it traded in the previous session on Friday last week.

This happened as the day’s forex turnover increased by 85.64 per cent, with $172.24 million posted as against $92.78 million recorded in the previous session on Friday last week.

It experienced an intraday low of N420.97 and a high of N400.00 before closing at N411.75 on Tuesday.

The disparity between the black market and official market rates is pegged at N93.25, translating to a margin of 18.47 per cent as of the close of business on Tuesday.