Naira drops to N1,370/$ at parallel market, gains marginally at official window

The naira declined to N1,370 against the dollar at the parallel section of the foreign exchange (FX) market on Wednesday.

This represents a 1.48 percent depreciation from N1,350 traded on April 29.

Currency traders, also known as bureau de change (BDC) operators, put the buying rate of the greenback at N1,330 and the selling price at N1,370 — leaving a profit margin of N40.

At the official window, the local currency appreciated by 1.98 percent to N1,390 on April 30 — from N1,419.11 on April 29.

During trading, the exchange rate rose as high as N1,450 and as low as N1,200 according to data from FMDQ Exchange, a platform that oversees FX trading in Nigeria.

The naira devaluation has continued to pose significant challenges to firms, cutting deep into profit margins and eroding shareholders’ dividends.

On April 30, Aliko Dangote, chairman of Dangote Industries Limited, said the devaluation of naira created the “biggest mess” for the company in 2023.

“We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends because if you look at our dividends last year, it was almost 50 percent more so we will try and get out of the mess,” Dangote said.

“The biggest mess created was actually the devaluation of the naira from N460 to N1,400.”

He said almost 97 percent of the companies, especially in food and beverages businesses, will not pay dividends this year due to the FX constraints.