CEM REPORT, MARKET | Naira crashed to an all-time low at the Nigeria’s official foreign exchange (FX) market on Tuesday with an exchanged rate of N993.82 per dollar, a 25.81 percent fall when compared to the N786.98 per dollar it traded on Monday.
According to data posted by FMDQ, the FX market recorded low dollar supply as the daily foreign exchange market turnover declined by 66.01 percent (N171.53) to $88.31 million on Monday from $259.84 million recorded on Friday.
At BDC market, the naira failed to sustain its gains recorded Monday as dealers bought the dollar at the rate of N1,167 and sold at the rate of N1,172. This is an increase as against the N1,163 and N1,168 they bought and sold it on Monday
Pounds at the official market currently sold at the rate of N1,104.5616 and bought at the rate of 1103.3477.
The federal government has said it is introducing some regulations to control the foreign exchange market and halt illicit currency trading that has been blamed for the unabating weakening of the Naira.
This was disclosed by Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms while speaking with Bloomberg.
He further mentioned that this plan includes measures to combat illegal currency trading with the hope to bridge the gap between the official and unofficial exchange rates and establish a “fair price” for the naira by the end of 2023.
He said, “The Federal Government plans to introduce new foreign exchange rules, including a crackdown on illicit currency trading.”
Oyedele also revealed to Bloomberg the government’s intention to establish transparent guidelines for the official foreign exchange market, following the resolution of a substantial backlog of approximately $6.7 billion in dollar demand.
He said that, “We think all of that will happen by December, and may be in a matter of a couple of weeks we will begin to see the results, such that before the end of the calendar year, naira should find its true value, not the one that is being done currently in the parallel market.”