Nigeria’s Naira Plunges Amid FX Supply Shortage

In a dramatic turn of events, Nigeria’s currency, the Naira, has taken a significant hit against the US dollar. Over the past 48 hours, the Naira has dropped by N52.24, with the latest data from the FMDQ revealing a weakened exchange rate of N1653.02 on Tuesday. This decline represents a substantial loss of N52.24 compared to the N1600.78 traded just last Friday.

The sharp depreciation of the Naira is a concerning trend, marking the second time the currency has lost value this week. Initially, the Naira had started the week with a relatively stable exchange rate of N1603.16 per dollar on Monday. However, the situation took a turn for the worse as the week progressed. The currency’s fluctuations can be attributed to a drastic decline in foreign exchange transactions, with a turnover of $176.15 million – significantly lower than the $359.22 traded at the start of the week.

Parallel to the fluctuations in the official foreign exchange market, the black market is also reflecting the Naira’s vulnerability. As of Tuesday, the Naira was trading at N1728 per dollar on the black market, underscoring the currency’s ongoing struggles. Despite interventions by the Central Bank of Nigeria, the Naira continues to experience instability in the FX market.

This volatility raises concerns about the nation’s economic outlook and the potential implications for businesses and individuals relying on foreign exchange transactions. As the situation evolves, one thing is clear: the Naira’s recent plunge is a pressing issue that demands close attention and strategic solutions to stabilize the currency and restore confidence in the market.