Exchange prices fell across the foreign exchange (FX) market as Nigerians focused on the naira’s shortage across the country. The naira fell to N462 per US dollar, down 0.1% from N461.50 on Wednesday, according to investors and exporters.
According to audited documents presented to the Nigerian Exchange, rate fluctuation has increased losses experienced by makers and importers in the fast-moving consumer products industry. The Nigerian economy is facing a double whammy of intensified demand-supply constraints caused by foreign currency scarcity ahead of the 2023 elections.
Foreign investors remain on the sidelines while the domestic economy remains shaky. Market analysts predict that hot cash would stay limited following Moody’s reduction of Nigeria’s government ratings.
The naira is not widely available to Nigerians in the local economy, fuel is limited due to price increases of more than 100%, and voters’ cards are in short supply.
On Wednesday, the naira was sold at N461.50 at the investors and exporters window. However, demand remained largely stable until Thursday, owing in part to a scarcity of local money for transactions.
The exchange rate in the parallel market has likewise stayed steady from the previous week’s closure, selling at #755 from N748. FX traders told MarketForces Africa that the apex bank’s naira limitations and insufficient supplies have hampered demand.
Depositors have continued to struggle with a paucity of fresh naira notes despite a 10-day extension provided by the Central Bank of Nigeria (CBN). Today, several Nigerian banks have ceased feeding their automated teller machines with cash to give to clients.
This has raised pressures on transactions while unorganised currency traders increase charges to 10% of the amount requested via point-on-sales service machines, a trade pattern which has spread across. Unfortunately, the exchange rate in the black market has failed to improve amidst a decline in the volume of naira notes in circulation.
