Naira continues to slide in black market amid soaring demand for dollars
By Sodiq Adelakun
The Nigerian currency faced another tough day in the foreign exchange market as the naira depreciated further to N1,140 against the U.S. dollar in the black market on Monday.
The ongoing pressure on the FX market is attributed to a surge in demand from end users seeking the American currency.
This latest dip in value marks a 0.44 percent decline from the N1,135 rate recorded last Friday.
Currency traders in the CMS area of Lagos were seen exchanging the dollar at N1,100 during the morning session, indicating a slight variance in rates across different locations.
In Ibadan, the exchange rate reached N1,150 per dollar, while at the Lagos Airport, dollars were being traded at N1,145 each.The naira’s struggle against the dollar has been a point of concern, with its value hitting a record low of N1,310 on October 24, 2023.
However, there was a brief respite when it strengthened to N1,020 per dollar on November 3, 2023, offering a glimmer of hope to market watchers.
The persistent volatility in the FX market underscores the broader economic challenges facing Nigeria, including inflationary pressures and dwindling foreign reserves.
The Central Bank of Nigeria has been implementing various measures to stabilise the currency, but the black market rates continue to diverge significantly from the official rates.
As businesses and individuals scramble to secure dollars for their transactions, the gap between the official exchange rate and the black market rate widens, raising concerns about the effectiveness of the current monetary policies and the potential impact on the Nigerian economy.
Market analysts are closely monitoring the situation, with many calling for more robust interventions to curb the downward spiral of the naira and restore confidence in the nation’s currency market. The coming days are crucial as the country looks for ways to navigate through these turbulent financial waters.
At the Autonomous Foreign Exchange Market (NAFEM), naira appreciated by 5.87 percent as the dollar was quoted at N791.75 on Friday compared to N841.14 quoted on Thursday, data from the FMDQ indicated.
The market recorded the highest spot rate of N1,120 per dollar and lower rate of N701 on Friday at the official market. The daily FX market turnover rose by 23.60 percent to $157.78 million on Friday from $127.65 million recorded on Thursday
