The value of Naira on Thursday depreciated against the US dollar and British Pounds Sterling in the parallel market, widely known as the black market.
Naira dropped to a 3 year low value on Thursday in the parallel market. The naira saw its value drop to N430/$1 against N425/$1 on Wednesday. Similarly, naira slumped in value against the British pounds to trade at N500 per GBP compared to N495 per GBP on Wednesday
The Nigerian naira has been under immense pressure since the slump in oil prices due to low demand as a result of the Coronavirus pandemic. Since oil is the measure source of revenue for the government as well as foreign exchange for the highly oil dependent economy.
In it’s effort to avert a free fall in the value of Naira, the Central Bank of Nigeria (CBN) in March “technically devalued Naira” and also maintained it’s forex intervention in the foreign exchange market.
This technical devaluation saw the I&E window rate move from N360/$1 to N380.2/$1 while the official exchange rate moved from N306/$1 to N360/$1.
As importers still need to buy goods, the demand for dollar outweighs the supply due to low foreign exchange inflows. The foreign reserve has been put under pressure resulting in it’s decline to its current value of $33.62bn.