Due to ongoing demand pressures that keep devaluing the currency, the parallel market exchange rate has drastically decreased, falling to a record low of N1960 per Euro.
This is a significant drop of N105, or 5.36%, from the N1,855 rate that was seen on the illicit market the day before.
This depreciation marks the lowest point in the Naira’s historical performance against the Euro and is an unparalleled event.According to the National Bureau of Statistics (NBS) for January 2024, at the same time, the depreciation of the Nigerian Naira has persisted in black-market exchange rates, which has been made worse by a significant increase in inflation.
The inflation rate surged to 29.90%, indicating a significant rise from the 28.92% recorded in the previous month.
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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 Naira depreciated against dollar in the parallel forex market, where forex is unofficially traded, with the exchange rate quoted at N1,880/$1, reflecting a 2.66% decrease from the N1,830 rate it closed at the previous day, according to Nairametrics tracker.
Additionally, the Great British Pound (GBP) stood at £1/N2260, a decline from £1/N2,210 recorded the previous day, this marks a notable decrease of 2.21% compared to the N2,210 rate recorded the previous day.
THE MATRIX reported that it has been a tumultuous twenty-four hours on the renowned cryptocurrency platform, Binance, after the exchange rate between the naira and the popular stablecoin, Tether (USDT), plummeted to approximately N1900/USDT before subsequently rising to N1354.3.
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However, by 7 am on Thursday, February 22, the naira was trading between N1680-N1710/$1 USDT.
This situation arises amid several reports of a crackdown on cryptocurrency trading, which some authorities view as a significant contributing factor to the rapid depreciation of the naira.
Tether (USDT) is a stablecoin used as a medium of exchange for cryptocurrency traders looking to trade their local currency against the dollar. One USDT is equivalent to $1.
This dramatic drop and subsequent recovery underscore the volatile nature of cryptocurrency markets, especially in the context of Nigeria’s current economic climate.
The exact cause of the wild volatility experienced in the last 24 hours remains unclear, even as some attribute it to a broader crackdown on cryptocurrency trading by certain authorities, who argue that such activities have been contributing to the rapid devaluation of the naira.
