Naira Continues to Decline Against Dollar, Prompting Concerns in Nigerian Markets.
The Nigerian currency, the naira, has experienced further depreciation against the US dollar in both official and unofficial foreign exchange markets, despite efforts by the Central Bank of Nigeria (CBN) to stabilize the situation.
The latest data from the foreign exchange market reveals a continued decline in the value of the naira against the dollar, raising apprehensions among Nigerians about the currency’s trajectory. In the official Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira closed at ₦1,308.52/$1, representing a 0.6% depreciation compared to the previous day’s rate.
Additionally, the naira experienced losses against other major currencies such as the pound sterling and the euro, further exacerbating concerns about its stability. In the unofficial market, bureau de change (BDC) traders reported a depreciation of ₦25, with the naira trading at ₦1,300/$1, reflecting ongoing challenges in the foreign exchange landscape.
Efforts by the Central Bank of Nigeria to mitigate the naira’s fall include conducting dollar sales to licensed BDC operators and fixing exchange rate limits for selling to Nigerians seeking dollars. Despite these interventions, the naira’s depreciation persists, underscoring the need for comprehensive solutions to address the underlying issues affecting the currency’s value.
Market observers emphasize the importance of sustained efforts by regulatory authorities and market players to restore confidence in the naira and prevent further depreciation. However, the evolving situation underscores the complexities involved in managing Nigeria’s foreign exchange market amid economic uncertainties and external pressures.