The Nigerian currency, the Naira, is facing a continuing trend of depreciation against the Dollar in the foreign exchange market. This situation has caused concern among Bureau De Change Operators and the general public.
Dayyabu Mistila, a Bureau De Change Operator in Wuse Zone 4, expressed his worry about the current state of affairs. He revealed that the Naira is now exchanging at N1,160/$1 in the parallel market. Mistila added, “The situation is difficult to predict. Right now, I buy Dollars at N1,150 and sell at N1,160/$1. I have enough foreign currency at the moment.”
Last Friday, at the FMDQ market, the Naira closed at $/₦808.27. This signifies a further decline for the Nigerian currency.
The recent depreciation of the Naira comes in the wake of the Central Bank of Nigeria lifting forex restrictions on essential commodities like rice, cement, and 41 other items. The apex bank introduced this measure to ease the pressure on the Naira in the foreign exchange market.
Despite the CBN’s intervention, the impact on the Naira’s value has yet to be seen as it continues to slump against the Dollar.
It is worth noting that since its floatation on June 14, the Naira has consistently depreciated against the Dollar in the forex market.
This ongoing trend raises concerns about the stability of the Nigerian economy. It has significant implications for businesses, importers, and the general population, as the purchasing power of the Naira weakens against other currencies. Analysts have cited various factors contributing to the depreciation, including falling oil prices, dwindling foreign reserves, and a lack of forex inflows.
The government and relevant financial institutions should take urgent measures to address the worsening forex crisis. It is imperative to promote policies that encourage and attract foreign investments, increase forex inflows, and diversify the economy to reduce dependence on oil. This multifaceted approach will help stabilize the Naira and ultimately boost economic growth.
As the forex crisis persists, Nigerians are urged to stay informed and be financially prudent. It is crucial to explore alternative investment options and consider hedging against the currency volatility. Additionally, individuals should make informed decisions regarding foreign exchange transactions to mitigate the impact of the Naira’s depreciation.
It remains to be seen how the government and central bank will respond to this challenging situation. Quick and effective action is required to restore confidence in the Nigerian currency and ensure a stable and thriving economy for the nation.