Exchange rate between naira and dollar falls to N685.5/$1 at P2P market

The exchange rate between the naira and the US dollar has fallen to a record low at N685.5/$1 at the peer-to-peer (P2P) forex market, from cryptocurrency P2P exchange market shows.

The dollar which was traded at N667/$1 yesterday has now fallen further by 2.8% to N685.5/$1, as demand for foreign exchange remains elevated amidst sustained scarcity.

The P2P market often traded in small volumes and the unit of exchange is the cryptocurrency USDT, which is a stablecoin that trades 1:1 with the dollar.

Similarly, Bureau De Change operators sold forex at N665/$1 on Tuesday, indicating continuous nosediving of the local currency, Nairametrics reports.

Meanwhile, in a conversation with a BDC operator at the Lagos International Airport, he stated that he sells dollars for N675/$1, while he buys from customers at the rate of N665/$1, indicating a N10 margin on every dollar.

Exchange rate for “inflows”, a term for dollar transfers from a foreign country into Nigeria or in another account in exchange for naira locally ranges from between N665-680 from some of the checks we conducted.

While the exchange rate is experiencing huge volatility and disparity at the unofficial markets, the Investors and Exporters window, where forex is traded official has also seen some level of a downtrend in recent weeks, albeit controlled.

Notably, the naira fell to N431/$1 at the I&E window on Tuesday’s trading session, the lowest rate recorded since the beginning of the year. This is following the recent decline in the volume of FX available in the market. On Tuesday, only about $58.03 million in FX value exchanged hands, representing a 35% decline compared to $89.8 million that was traded the previous day.

Some BDC operators have blamed the volatility in the parallel market on the fragmented and disorganized state of the market. Some have also blamed it only significant rise in demand as a result of panic buying.

Meanwhile, some P2P exchange markets traded at lower rates this morning. For example, on Trove, the exchange rate was stated at N665 to a dollar, while Bamboo was N655/$1. It is also worth noting that N685.5/$ is the lowest rate stated on Binance.