Naira Plummets Massively Against Dollar as First Bank Sells Dollar for ₦500

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Dollar to Naira Black Market Exchange Rate Today , Black Market Dollar To Naira Exchange Rate Today

The Naira has fallen to its lowest value against the dollar, and First Bank is now selling dollars for ₦500.

 

The Nigerian currency, the Naira, has once again crashed against the US dollar, currently trading at 417.25 at the official window.

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The official Investors and Exporters (I & E) window exchange rate between the naira and the US dollar closed yesterday at 416.00/$1.

The Naira crashed against the US dollar on Thursday, opening at 417.25/$4 after closing at N416.00/$1 on Wednesday, January 5, 2022. This represents a 0.82% (1.25) depreciation compared to the N415/$1 recorded in last week’s trading session.

Also, some Nigerian commercial banks are now selling dollars for N500.

Our correspondent, who banks with First Bank of Nigeria, made a payment online using PayPal. He was charged $40,000 for $80. Converting to know what the exchange rate used, it was discovered that 1 US dollar is now 500 Nigerian Naira.

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The Naira has depreciated against the US dollar on the black market, opening at 565.00/$ and closing at N567/$.

Sales of FX to banks fall to $1.65 billion, Amid CBN probe of FX defaulters.

Total foreign exchange sales to deposit money banks by the Central Bank of Nigeria fell to $1.65 billion in August 2021 from $2.05 billion in July 2021.

This was revealed in the CBN’s report on forex supply for August 2021.

The CBN directed all commercial banks to publish the names and Bank Verification Numbers (BVNs) of all defaulting customers who presented fake travel documents to purchase BTA/PTA.

What the CBN has to say

“CBN will intervene in the foreign exchange market to ensure systemic stability and adequate liquidity.  The Bank’s total foreign exchange sales to authorised dealers in August were US$1.65 billion, a 19.3 percent decrease from US$2.05 billion in July.”

 

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Foreign exchange sales to interbank, Swap transactions. SME interventions all increased by 63.5 percent, 72.3 percent, and 42.5 percent, respectively, to US$0.28 billion, US$0.46 billion, and US$0.17 billion.

In comparison to the previous month, the CBN’s “interventions at the Secondary Market Intervention Sales (SMIS) and Investors’ and Exporters’ (I&E) fell by 33.8 percent and 14.7 percent, respectively, to US$0.52 billion and US$0.23 billion.”

What you need to know

Mr Godwin Emefele, the Governor of the Central Bank of Nigeria (CBN), announced the suspension of foreign exchange sales to Bureau de Change (BDC) operators at the end of July Monetary Policy Committee (MPC) meeting, while briefing journalists on the MPC decision.

The new Bank policy, which has been met with skepticism by the volatile FX market, will not award new licenses to BDCs during the review period.

Under the new regime, the CBN will only sell forex to Deposit Money Banks (DMBs) for resale to the general public. To ensure a smooth implementation of the new policy, the CBN had directed all DMBs to set up teller points at designated branches across the country to fulfill legitimate forex requests for Personal Travel Allowance (PTA), Business Travel Allowance (BTA), tuition fees, medical payments, and SMEs transactions.

The CBN was selling $20,000 per week to over 5,500 BDCs before the weekly direct allocation of foreign exchange to them was stopped. This equates to approximately $110 million per week and $5.72 billion per year.

 

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