The value of the naira has recovered, climbing to N730 per dollar. Since the redesign announcement, the local currency has strengthened. Days after the naira hit an all-time low due to the enormous market speculation reaction to news of its redesign, it is now trading at roughly N730/$.
Traders on the dark web have reported this.
An N900/$1 exchange rate was psychological torture for most people five days ago, but today it’s a mere curiosity. In other words, nobody saw the naira’s amazing surge coming.
Exchange Rate of US Dollar to Nigerian Naira as of 11 November 2022 (Black Market)Check the Rate of Exchange Tonight As the Naira Continues to Appreciate at the Parallel Market
Abu, a Lagos-based black market trader, justified the rise in value by saying that the market had returned to normal after an initial drop brought on by panic buying.
There was a sudden uptick in demand for the dollar after the CBN’s redesign announcement. The creation of the new Naira note caused petty people to freak out. As the saying goes, “I knew it was going to fall, but I didn’t know it would fall this fast.” One more underworld merchant, Bola, commented on the market’s unpredictability by saying that he was pleased with the rise in value. A quote from what he had to say:
“With the market’s recent volatility, it’s become harder to make reliable predictions about the foreign exchange (FX) market. I don’t know what’s influencing the Naira’s value, but I’m glad it’s being recognized. What the people of Nigeria think: The reported rise in the value of the naira has prompted strong reactions from some. Financial analyst Kalu Aja tweeted simply, “Naira is soaring,” acknowledging the enormous appreciation.
When the value of the Naira dropped significantly, it led to rising prices, which Daniel Regha found unacceptable. In his words:
While the value of the dollar relative to the naira has been declining, consumer prices in Nigeria have remained stable (extremely high). Therefore, I fail to find the good in this report. What’s more, the value of the currency was significantly lower before the APC won power. For either the APC or the CBN, this is a loss. And yet another Twitter user, @ManLikelcey, expressed hope for the naira’s future. Dollar/Naira fell to 680, he added and would fall further in the following weeks.
Last but not least, @Naiia PR pleaded with importers, “Don’t be unhappy, the gains the naira is making versus the dollar should show in the price of your items.”
The history: When the Central Bank of Nigeria (CBN) announced that the N1000, N500, and N200 naira notes would be redesigned, it allowed Nigerians less than 100 days to “dispose of” any of the old banknotes they still possessed.
Despite the fact that the naira’s condition has worsened as a result of the monetary policy’s intended effect—that is, reducing the amount of money outside the banking system in order to lower inflation—the currency has not yet recovered.
The statement caused the local currency to tumble versus the US dollar on the illegal market by its largest margin ever. Between October 26th (when it was about N760/$1) and November 6th (when it was around N900/$1), the value of the naira fluctuated significantly.
The CBN and EFCC worked together to remove BDC licenses as a direct result of the widespread currency speculation. A few days after the CBN’s statement, the Economic and Financial Crimes Commission (EFCC) conducted raids on black market operators in Lagos and Abuja. It is estimated that 87 FX dealers were detained in Abuja, Lagos, and Kano.