The Naira, Nigeria’s currency, saw a significant depreciation against the US Dollar in the official foreign exchange market this Wednesday. Data from FMDQ revealed that the Naira weakened to N951.22 against the Dollar, marking a 7.91% decrease or 144.49 loss compared to its previous rate of N806.73/$1 on Tuesday.
This decline reflects the first instance of the Naira dropping against the US Dollar this week. The reduction in dollar supply by 4.94% to $135.58 million from $142.63 million further contributed to this situation. In the parallel market, the Naira also experienced a slight depreciation, trading at N1175/$1 on Wednesday as opposed to N1170/$1 the day before.
Dr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria, expressed optimism at the Chartered Institute of Bankers of Nigeria’s 50th-anniversary event, emphasizing his confidence in the stability of the Naira. He stated, “I’m confident and optimistic that by taking appropriate corrective actions and strategic steps, we can restore macroeconomic stability and address fundamental flaws.”
Since the Central Bank of Nigeria floated the Naira on June 14, the country’s currency has been grappling with consistent fluctuations in the FX market. Notably, Prof Godwin Oyedokun, a financial expert, attributed Nigeria’s forex crisis to weak economic fundamentals, low foreign reserves, increased external debts, and a dual forex window.
The fluctuating nature of the Naira in the forex market poses significant challenges for Nigeria’s economy, warranting a strategic approach to restore stability and foster economic growth.
