Nigerian Currency Plunges to New All-Time Low – Central Bank Blames Speculators – Finance Bitcoin News
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 dollar. The head of a Nigerian association of exchange office operators insisted that crypto trading could be to blame for the naira’s recent fall in value.
Nigerians convert to USD
According to local reports, the parallel market rate of the Nigerian currency against the dollar recently plunged to a new low of N710 per dollar. The currency’s rapid depreciation is reportedly being fueled by Nigerians converting their savings from naira to dollars.
Yet, despite the currency continuing to depreciate on the parallel market, the Central Bank of Nigeria (CBN) insists that the naira’s official exchange rate against the dollar remains at about N424 to $1.
In a statement after the naira’s recent fall, Osita Nwanisobi, the CBN’s director of corporate communications, blamed speculators for causing the currency’s recent fall. Nwanisobi nevertheless maintained that the central bank’s interventions such as the Naira for Dollar incentive scheme and the RT200 FX program are already helping Nigeria address the long-standing problem of foreign exchange shortage.
Solving the country’s foreign currencies helps stabilize the naira’s exchange rate. Yet, as a recent report by Bitcoin.com News suggested, the CBN’s Naira for Dollar remittance incentive scheme – launched in March 2021 – has not helped to stop the naira depreciation. The report pointed to the naira’s fall against the dollar which was more than 25% at the time.
Crypto trading fuels Naira depreciation
In addition to his claims that the central bank’s interventions were working, Nwanisobi said Nigerians must also help “prop up the value of the naira”.
Meanwhile, Aminu Gwadabe, president of the Association of Bureau de Change Operators of Nigeria, has been quoted in a Bloomberg report as suggesting that crypto trading could be fueling the naira’s weakening.
“The USD exchange rate on the crypto floor is used to determine the value of the local currency,” Gwadabe is quoted as explaining. On why Nigerians are buying US dollars, Gwadabe said they did this because they have lost confidence in the naira.
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