The Nigerian Naira on Wednesday experienced a significant depreciation, reaching a record low of N1,830 per dollar in the parallel market, commonly referred to as the black market.
This marks a 7.10% decline or N130.00 weaker compared to the previous day’s closing rate of N1,700.
The observed depreciation underscores the severity of the current economic challenges, with this drop representing the lowest point in the historical performance of the Naira.
The continued devaluation of the Naira in the black market is compounded by a substantial surge in inflation, as reported recently by the National Bureau of Statistics (NBS) for January 2024.
The inflation rate surged to 29.90%, indicating a significant rise from the 28.92% recorded in the previous month.
This data reflects a noteworthy uptick in the headline inflation rate for January 2024, with a 0.98% increase compared to December 2023 figures.
These developments persist despite the Central Bank of Nigeria’s (CBN) implementation of several policies aimed at bolstering the supply of foreign exchange (forex).
Similarly, the Great British Pound (GBP) stood at £1/N2210, a decline from £1/N2,120 recorded the previous day, this marks a notable decrease of 4.07% compared to the N2,120 rate recorded the previous day.
Additionally, the Naira weakened against the Euro by 2.43%, closing at N1855/EUR1 compared to N1810/EUR1 reported the previous day.
In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,876.50/$1 as of 12 pm.
The Crypto trading platform, Binance, has confirmed that it has limited trading on the Nigerian currency for the USDT, a stablecoin pegged against the US dollar, to address what it described as unusual currency movement.
While many Nigerians have been facing restrictions with buying and selling USDT on the platform since Tuesday, Binance said its action was “to protect users and prevent any abuse.
”The company also distances itself from the forex debacle in Nigeria saying its platform is “market-driven and not intended to be a proxy for currency pricing in Nigeria.”
This development comes amidst unconfirmed reports that the Central Bank of Nigeria (CBN), in conjunction with other government agencies had allegedly ordered Binance to set a cap on Nigerian traders selling USDT.
