The Nigerian currency faced another harrowing day on Tuesday as it plummeted to an all-time low on the black market. Shockingly, the naira reached a staggering exchange rate of N1,825 per dollar, representing a significant 6.3% drop compared to Monday's closing rate of N1,710.
Compounding the currency's woes, both official and unofficial dollar transactions experienced a dramatic decrease. Data revealed a staggering 26.59% drop in combined dollar sales facilitated by banks and individual trades, totaling a mere $66.43 million on Monday. This sharp decline follows a similarly low figure of $84.10 million reported on Friday, underscoring the ongoing challenges faced by Nigeria's currency market.
The continuous depreciation of the naira against the dollar raises concerns about its broader implications for the Nigerian economy. A weakened currency not only affects the purchasing power of citizens but also poses challenges for businesses, particularly those reliant on imports. Additionally, it can exacerbate inflationary pressures, further straining household budgets and hindering economic growth.
Against this backdrop, policymakers face mounting pressure to implement measures aimed at stabilising the currency and restoring confidence in the economy. Addressing underlying factors contributing to the naira's decline, such as fiscal deficits, inflation, and external economic shocks, will be crucial in charting a path towards sustainable economic recovery. As Nigeria grapples with its currency crisis, decisive action and effective policy interventions are needed to mitigate the adverse effects on businesses, consumers, and the overall economy.
Host: Perpetua Fasanmi-Peter
Guest: Oladipo Ajayi, Head, Fixed Income and FX, Chapel Hill Denham Securities, Lagos, Nigeria
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Nigerian Naira Plummets to Record Low Against Dollar | Headlines on Business Edge | 21-02-24
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