Naira Plummets to 1,510/$ Despite CBN Interventions

The Nigerian naira experienced a significant depreciation over the weekend, reaching N1,510 against the US dollar on the parallel market and 1,466.31 at the official market.

According to reports from the National Autonomous Foreign Exchange Market (NAFEM), the naira depreciated by N40 between Thursday and Friday, compared to its previous rate of N1,426 to a dollar.

Despite efforts by the Central Bank of Nigeria (CBN) to stabilize the currency, including supplying dollars to Bureau De Change (BDC) operators and implementing various reforms, the naira has struggled to maintain its value.

A recent Bloomberg report identified the naira as the worst-performing currency globally over the past month, signaling ongoing challenges in the foreign exchange market.

In response to the crisis, Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), called for measures to address the liquidity shortage, including granting amnesty to individuals holding foreign currencies to encourage them to bring it into the market.

Experts have pointed out that the root cause of the naira crisis lies in the supply-demand imbalance. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, emphasized the need for a stable framework to mitigate exchange rate volatility and boost confidence in the currency.

Meanwhile, economist Dr. Oluseye Ajuwon stressed the importance of the CBN tracing the source of foreign currency to tackle illicit inflows effectively.

As the naira continues to face downward pressure, stakeholders are calling for decisive actions to address the underlying issues and restore stability to the foreign exchange market.