Naira In Freefall: Biggest Dive To N1348/$ Signals Dollar Scarcity Crisis

Naira In Freefall: Biggest Dive To N1348/$ Signals Dollar Scarcity Crisis

In a startling turn of events, the Naira experienced its most significant plunge in the official Nigerian Foreign Exchange Market (NAFEM), plummeting by a staggering 24% to N1,348 per dollar…..CONTINUE READING

The dollar scarcity gripping the economy became glaring as data from FMDQ revealed the indicative exchange rate for NAFEM dropping from N891.9 per dollar the previous week to N1348.63, marking a worrisome N456.73 or 24% depreciation for the national currency.

This marks the lowest point for the Naira since June 14th last year when the Central Bank of Nigeria (CBN) streamlined multiple exchange rates in the official market.

The parallel market echoed this decline, witnessing the Naira depreciate to N1,425 per dollar from N1,400 over the weekend, resulting in a narrowed gap between the official and parallel market exchange rates.

Amid this turmoil, the CBN took action, releasing a substantial $500 million to address the backlog of verified foreign exchange transactions across various sectors. This move follows a recent payment of approximately $2.0 billion by the apex bank to settle outstanding commitments in key sectors such as manufacturing, aviation, and petroleum.

The Acting Director of the Corporate Communications Department at the CBN, Mrs. Hakama Sidi Ali, emphasized the bank’s commitment to swiftly resolving legitimate foreign exchange backlogs.

She conveyed the governor’s dedication to implementing a comprehensive strategy aimed at improving liquidity in the Nigerian foreign exchange markets in the short, medium, and long term.

The ongoing forex market reforms, designed to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities, aim to establish a stable exchange rate that boosts investor confidence and attracts foreign investment.

Sidi Ali urged all market participants to adhere to the rules, emphasizing that transparency would ensure fair exchange rate determination and stability for businesses and individuals alike.