In a significant development, the value of the US dollar has experienced a steep decline, reaching a range between ₦805 and ₦790 within the parallel exchange market. This shift in currency exchange rates was firmly observed on Tuesday.
The dollar’s journey began with a gradual descent from its morning rates of ₦925 to ₦930. However, the trajectory shifted around 4:00 pm, as news regarding the potential intervention of the Central Bank of Nigeria (CBN) disseminated among Bureau De Change (BDC) operators.
Recall that the CBN had recently unveiled its intention to undertake decisive actions aimed at reversing the Naira’s downward slide. This announcement spelled losses for currency speculators who had bet against the currency.
The acting Governor of the CBN, Folashodun Shonubi, hinted at these forthcoming measures on the prior day while providing a briefing to State House correspondents following a meeting with President Bola Ahmed Tinubu at the Presidential Villa in Abuja.
Observations conducted by our reporters in locations such as Allen Avenue and Bagada in Lagos point toward BDCs purchasing the dollar at around ₦900 and selling it at approximately ₦910. This marked a notable shift from the earlier rate of ₦970 to the dollar witnessed earlier in the day.
Meanwhile, at the Wapa forex market in Kano, BDCs were engaged in dollar purchases at ₦875, with selling rates at around ₦905.
Further scrutiny in the Zone 4 BDC market in Abuja showcased the surprise and uncertainty that prevailed among currency speculators due to this unforeseen development.
Conversely, within the Investors and Exporters window, the dollar commenced trading at ₦789/$. Throughout the course of the day, its value ranged from a peak of ₦799/$ to a trough of ₦740/$, ultimately concluding at ₦774/$. This marked an increase of ₦10 in comparison to the previous day’s closing rate of ₦764/$.
Reactions from various stakeholders surfaced in response to these developments. A currency exchange operator, speaking to our correspondent, expressed concerns about the possibility of further depreciation of the dollar. Many individuals might face financial losses due to having acquired the dollar at a higher rate than its current exchange value.
A customer who engaged with our correspondent recounted an experience where he was initially informed of a morning exchange rate of ₦930 per dollar. To his astonishment, upon attempting to exchange currency later in the evening, he was informed of the plummeting rate, initially quoted at ₦850, which further dropped to ₦790 within a span of 30 minutes. Under these circumstances, he had no choice but to exchange at the lower rate.
Ibrahim Muhammad, a BDC operator situated in Zone 4, conveyed his thoughts over the phone to Daily Trust. He underscored the sudden shift in the market’s dynamics, likely resulting in substantial losses for many participants within the parallel exchange market. Muhammad noted the receipt of the BDCs’ bidding eligibility list, emphasizing the unpredictability of subsequent developments. In anticipation of the CBN’s forthcoming intervention policy, there remains a sense of curiosity and uncertainty, with prospects for both a modest appreciation and the potential for further depreciation of the Naira. Presently, the dollar’s exchange remains within the range of ₦800 and ₦790.