ENUGU, Nigeria (VOICE OF NAIJA)- The Nigerian currency’s struggles persist as the naira faces further depreciation against the US dollar, reaching an alarming rate of N1,355 at the black market, according to recent checks by Daily Trust.
This unsettling development follows five months since the dollar initially breached the N1,000 mark in the parallel market.
While the dollar maintained its strength, closing at N902 (appreciating slightly from N931.23) at the official forex market, the impact of the poor naira value is reflected in the increased cost of living for Nigerians.
Despite receiving a $2.25bn foreign exchange support from AfreximBank and claims of improved forex obligation clearing by the Central Bank of Nigeria (CBN), the naira’s depreciation continues.
Contrary to earlier expectations of a naira rebound, the exchange rate fluctuated between N1,170 to N1,200 between December 2023 and the first week of January 2024.
However, in recent days, the pressure on the currency intensified, surpassing N1,300 to a dollar at the black market.
READ ALSO: Naira Records Massive Gain Against US Dollar
In Lagos and Abuja, the dollar exchanged for N1,350 and N1,355, respectively, contributing to the concerns expressed by Bureau de Change operators.
They highlighted the sudden increase in the dollar’s value against the naira, coupled with difficulties in obtaining the US currency.
Importers are significantly affected by the scarcity of foreign currency, with some discontinuing trading due to their inability to access dollars and the recent surge in import duty rates.
This dwindling importation trend raises concerns among industry experts, with calls for the government to introduce incentives to encourage traders to continue their businesses.
Economists, including Prof. Garba Sheka from Bayero University, Kano, warn of potential economic destabilization if the naira’s fall continues. He emphasizes the closure of many industries and the adverse effects on unemployment and inflation.
Sheka suggests relief might come from Dangote refineries, reducing the need for imported refined products and easing the pressure on the dollar.
The ongoing challenges in the forex market have prompted the Nigerian government to seek financial aid from the World Bank.
The Minister of Finance, Wale Edun, expressed hope for receiving $1 billion to $1.5 billion to support the budget.
Meanwhile, the apex bank has injected approximately $2 billion into various sectors, marking progress in resolving the forex backlog and settling obligations with foreign airlines.