The Nigerian naira suffered a significant blow, plummeting to N956/$ on the official Investor and Exporter forex window due to a drastic 46.77% decrease in dollar supply.
The latest market data from the FMDQ Securities Exchange reveals a staggering 13.78% decline from the previous rate of N840.53/$. Moreover, the volume of dollars traded in the market nosedived to $105.50m from $198.21m, underscoring the severity of the situation.
Starting the day at N800.90/$, the naira experienced extreme fluctuations, reaching highs of N1136/$ and lows of N615/$ before finally concluding trading at N956.33/$, highlighting the inherent volatility of the currency.
Despite recent efforts by the Central Bank to address the backlog of foreign exchange forward contracts, the naira’s instability continues to persist. Shockingly, the World Bank recently disclosed that the naira ranks amongst the world’s worst-performing currencies, having depreciated by a staggering 40% since June.
Furthermore, the Economic Intelligence Unit, the research and analysis division of the Economist Group, has cast doubt on the Central Bank’s ability to clear the backlog of foreign exchange orders. This skepticism is expected to exert sustained pressure on the naira.
The unit expressed, “In Nigeria, an unsupportive monetary policy implies that the naira will remain under pressure, while the central bank lacks the firepower to adequately supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors unnerved. High inflation and a continued spread with the parallel market will leave the exchange rate regime unstable and result in periodic devaluations.”
This disheartening turn of events underscores the urgent need for strategic interventions to stabilize the naira and fortify the foreign exchange market, which is pivotal for Nigeria’s economic resurgence and global competitiveness.
