Nigeria: Naira Drops to Record Low On Official Market After Devaluation

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Abuja — The Nigerian naira fell to a record low on the official market yesterday, with lenders quoting it 7.7% weaker against the dollar, following a currency devaluation aimed at unifying multiple exchange rates.

The naira dropped to 419.75 per dollar, from its last trade at 381 on Monday, its last official session. The official market rate, backed by the central bank, has been stuck at 381 naira to the dollar for almost a year after two devaluations last year.

No quotes have been available on the naira's official rate since Tuesday.

On the over-the-counter spot market NAFEX=FMDQ, the currency traded at 410.65 naira against the dollar on Friday, and it was quoted at 483 on the black market NGNFX=BDCN.

Nigeria operates multiple currency regimes, which frustrate businesses and have prompted calls from the World Bank for the rates to be unified to attract investment.

Rising dollar demand has put pressure on the naira as providers of foreign exchange, such as offshore investors, exited after the COVID-19 pandemic triggered a fall in global oil prices.

The World Bank has linked approval of a $1.5 billion budget support loan to currency reforms.

The central bank has been trying to unify the rates and boost the dollar supply through direct interventions. It extended an incentive offer last week to recipients of dollar remittances to try to encourage more inflows from the Nigerian diaspora.

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