Nigerian Currency Plunges to New All Time Low — Central Bank Blames Speculators

The Nigerian central bank has accused currency speculators of being behind the local currency’s recent plunge to a new all-time low of N710 against the greenback. The leader of a Nigerian association of bureau de change operators insisted crypto trading may be to blame for the naira’s recent plunge in value.

Nigerians Converting to USD

According to local reports, the parallel market exchange rate of the Nigerian currency against the greenback recently plunged to a new low of N710 per dollar. The currency’s rapid depreciation is reportedly being fueled by Nigerians who are converting their savings from naira to the greenback.

Yet, despite the currency continuing depreciation on the parallel market, the Central Bank of Nigeria (CBN) insists the naira’s official exchange rate against the dollar remains at approximately N424 for $1.

In a statement following the naira’s latest fall, Osita Nwanisobi, the CBN’s director of corporate communications, blamed speculators for causing the currency’s recent fall. Nwanisobi nonetheless claimed that the central bank’s interventions such as the Naira for Dollar incentive scheme and the RT200 FX Programme are already helping Nigeria address its longstanding problem of foreign exchange shortages.

Resolving the country’s foreign exchanges helps to stabilize the naira’s exchange rate. Yet as a recent report by Bitcoin.com News suggested, the CBN’s Naira for Dollar remittances incentive scheme — launched in March 2021 — has failed to help halt the naira depreciation. The report pointed to the naira’s plunge against the dollar which was more than 25% at the time.

Crypto Trading Fueling Naira Depreciation

In addition to his claims the central bank’s interventions were working, Nwanisobi said Nigerians must also help “shore up the value of the naira.”

Meanwhile, Aminu Gwadabe, president of the Association of Bureau de Change Operators of Nigeria, is quoted in a Bloomberg report suggesting that crypto trading may be fueling the naira’s depreciation.

“The USD rate on the crypto floor is used in determining the value of the local currency,” Gwadabe is quoted explaining. On why Nigerians are buying the U.S. dollar, Gwadabe said they were doing this because they have lost confidence in the naira.

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