Naira to Dollar Plummets to Historic Low of N1,410/$1 in Black Market Turmoil
The Nigerian Naira experienced an unprecedented drop, reaching a record low of N1,410 against the US dollar on the black market. This alarming figure represents a 3.29% decline, or N45.00 weaker compared to the previous day’s closing rate of N1,365.
The observed depreciation is unparalleled and serves as a grim indicator of the severe economic challenges currently faced by the nation. Market analysts point to a consistent surge in demand for dollars as the primary driver behind this historic decline.
Factors Influencing the Depreciation of Naira to Dollar.
The surge in demand for foreign exchange is attributed to various factors, including businesses actively restocking goods and acquiring raw materials. Additionally, individuals pursuing overseas studies contribute significantly to the heightened demand for dollars, possibly for tuition payments and related educational expenses.
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The departure of diaspora Nigerians, particularly noticeable after the holiday season, has also played a role in the increased demand for foreign currency. This trend is further compounded by the reopening of schools abroad, prompting international students to restock their foreign currency reserves for impending school fees and other financial obligations.
This unprecedented depreciation marks the lowest point in the history of the Naira against the US dollar, raising concerns about potential economic ramifications.
Pay Attention To Dollar to Naira Black Market Rate Today January 25, 2024 : Aboki FX Latest Rates
Forex Turnover Declines
According to reports, forex turnover dropped by 3.18% to $56.60 on January 24th, 2024, as the Nigerian Naira faced a marginal decline against the dollar in both the official and black markets. The official NAFEM window reported a 0.41% decrease, closing at N882.24 to a dollar, while the intraday high and low were recorded at N1313/$1 and N700/$1, respectively.
Similarly, the parallel forex market saw a 0.37% decrease, quoting N1365/$1, with peer-to-peer traders quoting around N1399.12/$1.
Central Bank’s Response to Naira to Dollar exchange rate.
In response to these concerning developments, the Governor of the Central Bank, Mr. Yemi Cardoso, addressed the undervaluation of the Naira. He assured that in 2024, the bank would work towards real price discovery in the foreign exchange market. Mr. Cardoso emphasized the need for coordinated measures on the fiscal side and pledged to implement inflation-taming policies.
He stated, “We believe that the naira is currently undervalued,” promising a more balanced and stable exchange rate through a coordinated approach with the fiscal side. Mr. Cardoso also highlighted efforts to increase foreign exchange reserves through partnerships and anticipated reductions in pump prices with the resumption of refinery operations.
As the nation grapples with these economic challenges, staying informed with Ejes Gist News – Your Source for Credible News in Nigeria Now becomes crucial.
