{"id":12231,"date":"2021-09-17T09:54:05","date_gmt":"2021-09-17T09:54:05","guid":{"rendered":"https:\/\/www.buyucoin.com\/crypto-labs\/nigerian-currency-plunges-to-new-low-of-570-10-of-value-lost-in-under-30-days\/"},"modified":"2021-09-17T09:54:05","modified_gmt":"2021-09-17T09:54:05","slug":"nigerian-currency-plunges-to-new-low-of-570-10-of-value-lost-in-under-30-days","status":"publish","type":"post","link":"https:\/\/www.buyucoin.com\/crypto-labs\/nigerian-currency-plunges-to-new-low-of-570-10-of-value-lost-in-under-30-days\/","title":{"rendered":"Nigerian Currency Plunges to New Low of 570 \u2014 10% of Value Lost in Under 30 Days"},"content":{"rendered":"

The Nigerian currency, the naira, plunged to a new all-time low of N570 for every dollar on September 16, 2021. This new exchange rate means since August 17, the naira has now lost about a tenth of its value on the foreign currency black market. <\/strong><\/p>\n

Naira Overvalued<\/h2>\n

In spite of this plunge, which has been attributed to the biting shortage of foreign exchange, authorities insist the naira\u2019s real exchange is unchanged at N411 for every dollar. This means forex buyers that source this commodity on the parallel market are now paying a premium of over N150.<\/p>\n

Alternatively, the new parallel market exchange rate of N570 may suggest that the Central Bank of Nigeria (CBN) is now overvaluing the naira by 40%. In fact, this latter point appears to be corroborated by comments made by the CBN governor, Godwin Emefiele. In his comments to a group of investors in late June 2021, Emefiele suggested<\/a> at the time that the naira was overvalued by 10%. He also hinted that devaluation of the naira was in the cards.<\/p>\n

However, since then, the naira\u2019s official exchange rate has remained unchanged while the currency\u2019s rate of depreciation on the parallel market appears to have accelerated, particularly in the past few weeks. Meanwhile, the central bank\u2019s unwillingness to devalue the naira may have created more problems for the CBN \u2014 the hoarding of foreign exchange.<\/p>\n

<\/p>\n

Foreign Exchange Hoarding<\/h2>\n

As an investigation by the Daily Trust found, \u201csome people and corporate entities in Nigeria are now saving their fortunes in dollars.\u201d In its report<\/a>, the publication quotes Malam Nura, a Bureau de Change operator, who said:<\/p>\n

If importers don\u2019t have dollars, and if the naira keeps falling, they may not be able to import and their businesses may be affected. I think this is why they are buying and holding it so that they can have enough for import for a long period.<\/p>\n

Bitcoin.com News has similarly reported<\/a> that Nigerians were accumulating foreign currencies in order to shield their wealth from the naira\u2019s depreciation.<\/p>\n

Aside from worsening the country\u2019s already precarious foreign exchange situation, the naira\u2019s continuing depreciation is believed to be fueling Nigeria\u2019s inflation woes. While data shows that the country\u2019s headline inflation dropped to 17.01% in August, a report<\/a> by Proshare attributes this to \u201cbase year effects.\u201d<\/p>\n

Regarding Nigeria\u2019s monthly inflation increase, the report concludes that this could be tied to the naira\u2019s \u201cweakness in the forex market\u201d and that this is now \u201cbeing transmitted into [rising] domestic prices.\u201d<\/p>\n

What should the CBN do to stop the naira\u2019s fall? Tell us what you think in the comments section below. <\/strong><\/em><\/p>\n

Bitcoin News
\nEconomics, Central Bank of Nigeria, Foreign exchange, forex market, Godwin Emefiele, naira depreciation, naira devaluation, Nigeria inflation, parallel market<\/p>\n","protected":false},"excerpt":{"rendered":"

The Nigerian currency, the naira, plunged to a new all-time low of N570 for every dollar on September 16, 2021. This new exchange rate means since August 17, the naira has now lost about a tenth of its value on the foreign currency black market. Naira Overvalued In spite of this plunge, which has been…<\/p>\n","protected":false},"author":0,"featured_media":12232,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[53,3],"tags":[],"class_list":["post-12231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","category-coin-news"],"_links":{"self":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/12231"}],"collection":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/comments?post=12231"}],"version-history":[{"count":0,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/posts\/12231\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media\/12232"}],"wp:attachment":[{"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/media?parent=12231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/categories?post=12231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyucoin.com\/crypto-labs\/wp-json\/wp\/v2\/tags?post=12231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}