FG’s Economic Plans in Ruins as Naira Breaks Record Against The Dollar in The Parallel Market

FG’s Economic Plans in Ruins as Naira Breaks Record Against The Dollar in The Parallel Market

  • The naira finally crashed below N1,000 to a dollar on the black market
  • Feelers from the street on Thursday, September 21, 2023, show that the local currency broke the threshold as demand for dollars skyrocketed
  • Currency dealers say importers and international students have flooded the black market seeking to purchase Forex

Before June 14, 2023, the Nigerian currency traded for N461 per dollar officially and above N700 on the streets.

After the Central Bank of Nigeria collapsed the multiple exchange rate windows in compliance with the economic policy and direction of President Bola Tinubu, the naira plummeted below N600 per dollar in the official window and above N800 per dollar in the black market.

Naira, Dollar, Tinubu
President Bola Tinubu grapples with high inflation and unstable FX Credit: State House
Source: Facebook

The naira continues to depreciate

The local currency has continued to spiral out of control as the government grapples with high inflation, which hit 25.80% in August from 22.79% in July.

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N1,235 per £1: Naira weakens against foreign currencies as CBN fails on promise to clear FX backlog

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On Thursday, September 21, 2023, the naira plummeted to a record low, crossing the N1000 per dollar threshold in the parallel market for the first time in Nigeria’s history.

As pressure mounted on the dollar, the local currency was quoted at almost 30% below where it officially closed on Wednesday, September 20, 2023, at the FMDQ.

The rush for Forex is at its frantic peak, with importers and international students putting pressure on the already scarce dollar for imports and school fees.

Bloomberg reports that the naira crash has drained much of the hope gained by the economic reform agenda of Tinubu soon after he took office.

The new President promised to unify the exchange rates and end subsidies on petrol, sending inflation soaring through the roof.

Read also

“No more N1K/$”: Naira recovers slightly against dollar after making history at black market

Analysts have blamed the naira crash on CBN’s failure to supply the dollar to the official market, a BusinessDay report said.

They reveal that the apex bank has been on the fence since the beginning of September as rumour filtered in of a possible change of guards amid a probe of senior officials by security agencies.

One of the most challenging jobs awaiting the new CBN governor, Olayemi Cardoso, is the naira's stability. It remains to be seen if he is up to the task.

“N771/$”: Naira reacts at the official market as tribunal rules in Tinubu’s favour

Legit.ng reported that the foreign exchange market reacted to the Presidential Election Petitions Tribunal (PEPT) judgment on Wednesday, September 6, 2023, favouring Tinubu.

According to data from the FMDQ on Wednesday, September 6, the naira lost after trading at N771 per dollar as against the N744 per dollar it traded on Tuesday, September 5, 2023.

The naira opened the day positively at N744 per dollar and lost marginally at the Investors and Exporters (I&E) window.

Source: Legit.ng

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