The exchange rate between the naira and the US dollar recorded a sharp fall on Friday morning, 21st October 2022, trading at a minimum of N755/$1 at the black market compared to N742/$1 recorded on Thursday. This is according to information from black market operators interviewed by Nairametrics.
The depreciation of the local currency at the black market was attributed to increased demand and sustained FX scarcity in the market. According to Nairalytics’ exchange rate tracker, the rate at N755/$1 is the highest on record. It also indicates a market differential of N313.87/$1 between the official market and the parallel market.
Also, at the peer-to-peer cryptocurrency exchange, the exchange rate fell to N751.99/$1 against the US dollar on Friday morning from N748.7/$1 recorded during the previous trading session.
Meanwhile, the Central Bank of Nigeria increased the monetary policy interest rate to 15.5% last month from 14% in a bid to tame the rising inflation in the country, which reached a 17-month high in August 2022, largely due to the global energy crisis and depreciating exchange rate.
Despite the move, inflation has remained stubbornly high, an uptick attributed to the depreciation of the local currency.
On the other hand, the exchange rate at the official market remained stable at N441.13/$ as a result of the constant intervention by the CBN to curb exchange rate volatility. Consequently, the nation’s external reserve has suffered a loss of over $2 billion year-to-date, falling to its lowest levels since 4th October 2022.
Specifically, the foreign reserve stood at $37.71 billion as of 19th October 2022 from $40.52 billion recorded as of the beginning of the year.
