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In the parallel market, Nigeria's currency, the Naira, dropped to N1,040 per dollar as supply surpassed demand.

Currency crisis in Nigeria deepens as its currency drops to ₦1,040 per dollar | Pulse Nigeria

Chinedu Okafor

In the parallel market, Nigeria's currency, the Naira, dropped to N1,040 per dollar as supply surpassed demand.

A report by a Nigerian business news publication, Nairametrics indicates that quotes for inflow range between N1035-N1045 to the dollar suggesting this was due to increased scarcity, based on what Forex traders had told the publication&nbsp;

The official exchange rate, which is N776.8 to $1, emphasizes the disparity between what Nigerians are experiencing within and outside of official channels.

In September, the benchmark exchange rate of N1000 to $1 was broken in the parallel market where unauthorized currency is transacted. Some analysts believed this to be a temporary adjustment.

However, the government's inability to entice foreign exchange inflows has stopped the exchange rate from going out of control and finishing each week worse.

<a href="https://africa.businessinsider.com/local/markets/a-look-into-how-business-in-nigeria-has-fared-since-president-tinubus-election/gsds2tl">Read also: A look into how business in Nigeria has fared since President Tinubu’s election</a>

Buyers and sellers quoted about N1040/$1 on the peer-to-peer market where the exchange rate is offered using Bitcoin. The exchange rate was listed at about N1022/$1 and N1017/$1 on foreign investment trading sites like Bamboo and Trove, respectively.

The difference in currency rates between the official and black market prices is now roughly 26%, or N265 to $1.

This contrasts with roughly N290/$1 or 38.6% before the unification of the currency rate, however under the official currency rates in effect right now, the exchange rate would have to decline to N1,200/$1 in order to reach the difference of 38.6%.

However, given the rate at which the gap is growing and the continued depreciation of the currency due to increased demand and tight supply, this scenario is feasible.

According to a frequent foreign exchange buyer who talked with Nairametrics on the condition of anonymity, the issue has gotten worse because no one can appear to acquire foreign exchange even at the official window.&nbsp;

The report by the publication also notes that the central bank is holding close to $20 billion in foreign currency swaps on behalf of banks. The $8 billion estimated to be outstanding in stranded money is in addition to this.

Currency crisis in Nigeria deepens as its currency drops to ₦1,040 per dollar

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