According to a cross-section of dealers who claimed to have traded on Saturday, November 5, 2022, the exchange rate between the naira and the dollar sold for N900/$1.
This is more than double the central bank’s official NAFEX exchange rate of N440/$1 reported on its website for November 4, 2022.
The rates closed above N870/$1 on Friday; however, several parallel market rates seen by entrepreneurng suggest rates depreciated further to as low as N890-N900/$1 if you want to buy from traders.
According to a tracker seen by entrepreneurng, the British Pound sold for around N1005/£1, while the Euro sold for around N865-N870/$1.
A quick look at peer-to-peer exchanges where dollars are also traded using the cryptocurrency USDT reveals that rates averaged N830/$1 as of Saturday evening, with rates ranging from N829 to N833.9?$1. In contrast to the inflow market, where trades can be in the millions, the average trade in this market is around $1,500 per transaction.
On Saturday, a reliable source who buys inflow dollars told us they bought at N900/$1. Non-cash forex transactions between two bank accounts are referred to as inflow dollars.
- Inflow dollars are typically more expensive than cash-based transactions due to the ease of movement of the funds.
- The Nigerian banking system restricts transfers and withdrawals of dollars deposited via cash.
An exchange rate of N900/$1 is a psychological ceiling that most analysts never thought would be breached this soon.
- The exchange rate depreciated to N800/$1 on the 1st of November, meaning it has taken just 5 days to fall by N100 to N900/$1.
- Should it continue to depreciate at the pace seen last week at the black market, then it could hit the N1000/$1 mark by mid-November.
- Another fun fact is that the disparity between official and black market rates is now over 100%. Data from the CBN website quotes the NAFEX rate at N440/$1, thus double that is about N880/$1.
The dollar-naira exchange rate is volatile, and traders claim there are no longer any anchor rates to follow. Most rates available are simply quotes and are not backed by closed deals.
- According to some traders, a rate can only be confirmed when an actual transaction is consummated, and different closed deals attract different rates.
