Discover the latest news as the Nigerian naira faces a record low on the parallel market, driven by shrinking dollar supplies from the central bank. Stay informed about the currency’s depreciation and its impact on the economy.
Nigerian Naira Hits Record Low on Parallel Market
The Nigerian naira has taken a significant hit, reaching a record low on the parallel market due to a dwindling supply of dollars from the central bank. This has compelled buyers to seek hard currency on the streets, exacerbating the currency’s depreciation.
As of Wednesday, the naira was being exchanged at a rate of 970 naira per dollar. This marks a decline from the previous day when it was at 962 naira per dollar and a substantial drop from the 903 naira per dollar rate at the beginning of the month. Umar Salisu, a foreign-exchange operator responsible for compiling this data in Lagos, reported these figures. This alarming rate is approximately 20% weaker than the official exchange rate of 776.60 naira per dollar, as reported by FMDQ, a Lagos-based platform.
Fast forward to today, September 20th, 2023, and the naira has further depreciated, now standing at an alarming rate of 1,000 naira per US dollar on the black market. This decline underscores the pressing challenges facing Nigeria’s foreign exchange market and its impact on the local currency’s value.
The reasons behind this depreciation may include a shortage of foreign currency reserves, reduced oil revenues (a significant source of foreign exchange for Nigeria), and economic uncertainties. These factors, among others, contribute to the naira’s struggle in the foreign exchange market.
The implications of this currency depreciation are far-reaching, affecting various sectors of the economy and the purchasing power of Nigerians. It highlights the need for effective monetary and fiscal policies to stabilize the currency and ensure economic stability in the country.
As the situation continues to evolve, both government authorities and financial institutions will need to work collaboratively to address the challenges facing the Nigerian naira and restore confidence in the currency.