CBN Announces New Dollar Exchange Rate As Naira Depreciates in Official, Black Market

• The CBN has released the latest exchange rates for Nigerian currency against the US dollar, pound, and others
• The new data shows that in the official market naira reversed its most recent gain to record a slight depreciation
• The naira also fell in the black forex market as traders quoted a new exchange rate for Nigerians buying and selling

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The value of the Nigerian currency reversed against the United States dollar in the official foreign exchange markets.

Data from the CBN showed that at the end of trading on Thursday, May 15, the naira closed at N1,599 per dollar in the Nigerian Foreign Exchange Market (NFEM).

Thursday's exchange rate in the official market represented a slight 0.31% change from the previous day's closing rate of N1,596.

The latest exchange rate marks a return to Tuesday's closing rate

Naira exchange rate vs euro, pound sterling

Naira also depreciated against the pound sterling and the euro in the official market.

The naira weakened further against the Pound Sterling in the official market on Thursday, depreciating by N1.09 to close at N2,126.46/£1, compared with Wednesday’s rate of N2,125.37/£1.

It also declined against the euro by N0.86 to sell for N1,791.24/€1, compared to the previous day’s N1,790.38/€1.

• Pounds Sterling: N2,115.26
• Euro: N1,808.90
• Chinese Yuan: N218.57
• CFA Franc: N2.78
• Danish Krona: N242.30
• Japanese Yen: N11.18
• Saudi Riyal: N426.10
• South African Rand: N84.65
• Swiss Franc: N1,954.23

Naira improves against dollar at black market

In the parallel market, also known as the black market, the naira yesterday depreciated to N1,635 per dollar in the parallel market.

Traders who spoke to Legit.ng confirmed that the dollar depreciated against the Nigerian currency.

"We sold the dollar at N1,635/$1 on Thursday, while we bought it at N1,620/$1; the euro traded between N1,790 and N1,805, and the pound sterling ranged from N2,140 to N2,155."

Consequently, the margin between the parallel market and NFEM rate widened to N36 per dollar on Thursday from N25.2 per dollar.

There is hope for the dollar as the FX market is expected to receive a boost after the temporary US-China tariff reduction agreement and recent rally in oil prices, spurring the country’s external reserves to climb, standing above $38 billion.

What this means is that CBN will be ready to defend the naira from further depreciation.

CBN interventions to stabilise naira

The CBN has taken many steps to keep the naira stable against the US dollar and other important currencies despite ongoing economic problems.

The bank knows that a steady exchange rate is important for a healthy economy, so it uses different methods to balance the demand and supply of foreign money.

One major action is selling dollars directly to licensed dealers and currency exchange shops. This helps increase the amount of dollars available, making it easier to meet demand and stop the naira from losing value too fast.

The CBN often focuses on providing dollars to key sectors like manufacturing, farming, and oil imports because these are important for the country’s growth.

The CBN also uses tools like changing interest rates and rules about how much money banks must keep in reserve. These measures help control how much money is moving around and reduce unnecessary demand for foreign currency.

The bank tries to give dollars first to important imports and limits dollars for non-essential goods. This helps ease the pressure on the naira.

It also works to make exchange rates fairer by narrowing the gap between official rates and those in the black market, though this remains a challenge.

The CBN encourages more foreign investment and money sent home by Nigerians abroad to boost its dollar reserves.

Even with these efforts, problems like relying too much on oil money and not exporting many other goods keep putting pressure on the naira.

So, while the CBN’s actions help, lasting stability will need bigger economic changes alongside smart banking policies.

BDC operators accuse banks of not selling dollars

Earlier, Legit.ng reported that Bureau de Change (BDC) operators in Nigeria have accused commercial banks of failing to sell foreign exchange to them.

They believe that this situation puts the naira in a precarious position in the foreign exchange markets.

Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), who raised the concern, said BDCs are grappling with limited availability of forex in an exclusive chat.

The article was updated with additional information by the head of the business desk, Victor Enengedi.

Source: Legit.ng