Nigeria – April 26, 2024 – The Nigerian Naira has extended its losing streak against the US Dollar, depreciating in both the official and parallel markets.
Official Market Decline:
- Data from FMDQ securities shows the Naira weakened to N1,309.88/$1 on Thursday, marking the fifth consecutive trading session with losses.
- This depreciation occurred despite a 61% increase in FX transactions on the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Black Market Slump:
- The situation in the unofficial market is even more concerning.
- The Naira plunged by N120 against the Dollar, reaching N1,420/$1, representing the steepest decline since February 2024.
CBN Intervention and Its Limits:
- The Central Bank of Nigeria (CBN) has attempted to curb the Naira’s slide by selling dollars to licensed Bureau De Change (BDC) operators.
- They have also set a fixed exchange rate limit for BDC sales.
- However, these measures appear to be having a limited impact.
Reasons for the Decline:
- The specific reasons behind the recent depreciation are not entirely clear from the provided information.
- However, general factors impacting the Naira could include:
- Increased demand for dollars
- Lower oil prices (Nigeria’s main export)
- Uncertain economic outlook
The Naira’s depreciation has implications for Nigerian businesses and consumers. Imported goods become more expensive, potentially leading to inflation. The situation will likely be closely monitored by the CBN and financial experts in the coming days.
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