Naira gains heavily at the black market after a long fall

By: Damian Okonkwo

The Nigerian Naira had strengthened massively against the US dollar at the black market after a massive fall to close the week exchanging at N680/$1.

Recall that Naira previously fell to its worst exchange rate ever to exchange at N900/$1 during the first week of November 2022 following the high dollar scarcity and news of an imminent change of the Naira note.

On the contrary, the story changed last Friday with an increased FX supply was witnessed at the market after a rumor circulated that the US Banks will be rejecting any dollar note printed from 2021 downwards which was not returned to the back before the end of 2022. This means holders of this dollars notes could no longer exchange them if the rumor turns out to be true.

This probably triggered a lot of traders who have been hoarding the dollar thereby creating high dollar scarcity in the market to quickly rush to the black market to exchange them.

As a result, there was a high demand for the Naira once again thereby raising its exchange rate against the US dollar at the black market.

To this end, the Naira appreciated by over 8.5% in less than five days to exchange at N680/$1 at the black market after it exchanged earlier at N745/$1 on Thursday and over N900/$1 during the first week of November.

Notwithstanding, the official exchange rate at the Investor and Export (I&E) window closed on Friday at N466.1/$ against the previous record of N445.67/$ recorded the previous day.

Above all, investors are still fearful that the rate might fall again ahead of the Christmas season.