Naira Hits All-Time Low of N1,225 Per Dollar at Parallel Market
Saturday 28 October 2023
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The Nigerian naira fell to its lowest level ever against the US dollar on the parallel market on October 29, 2023, trading at N1,225 per dollar. This is a significant depreciation from the previous day's rate of N1,170 per dollar.
The parallel market, also known as the black market, is an unofficial market where foreign currency is traded at rates that are typically higher than the official exchange rate set by the Central Bank of Nigeria (CBN). The parallel market is often used by businesses and individuals who need to access foreign currency quickly or who are unable to obtain it from the official market. CONTINUE READING.....
The depreciation of the naira on the parallel market is attributed to a number of factors, including:
- Increased demand for foreign currency from businesses and individuals
- Limited supply of foreign currency from the CBN
- Uncertainty about the Nigerian economy
The depreciation of the naira is having a negative impact on businesses and individuals in Nigeria. Businesses are facing higher costs for imported goods and services, while individuals are finding it more difficult to afford basic necessities.
The Nigerian government is taking steps to address the depreciation of the naira, including:
- Increasing the supply of foreign currency to the official market
- Tightening monetary policy to curb inflation
- Improving the country's business environment to attract foreign investment
However, it remains to be seen how effective these measures will be in stabilizing the naira. CONTINUE READING.....
Experts Weigh In
Economists and financial analysts have expressed concern about the depreciation of the naira, warning that it could lead to higher inflation and economic instability.
"The depreciation of the naira is a major concern for the Nigerian economy," said Professor Ndubuisi Nwokoma, an economist at the University of Lagos. "It will lead to higher prices for imported goods and services, which will erode the purchasing power of households and businesses."
"The Central Bank of Nigeria needs to take urgent steps to stabilize the naira," said Mr. Bismarck Rewane, managing director of Financial Derivatives Company Limited. "This could include increasing the supply of foreign currency to the official market and tightening monetary policy to curb inflation."
Impact on Businesses and Individuals
The depreciation of the naira is having a negative impact on businesses and individuals in Nigeria.
Businesses are facing higher costs for imported goods and services, which is reducing their profits and making them less competitive. Individuals are finding it more difficult to afford basic necessities, such as food and medicine.
The depreciation of the naira is also making it more difficult for Nigerian businesses to export their products and services. This is because foreign buyers are less likely to purchase goods and services from Nigeria when the naira is weak.
Conclusion
The depreciation of the naira is a major challenge for the Nigerian economy. The Nigerian government needs to take urgent steps to stabilize the naira and address the underlying causes of the depreciation.
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