The Naira fell from N840.53/$ to N956/$ on Thursday on the official Investor and Exporter foreign exchange window. This is as dollar supply declined by 46.77 per cent.
The crash in the exchange rate is 13.78 over Wednesday’s trading, according to data from the FMDQ Securities Exchange. Also, the turnover of dollars traded in the market fell to $105.50 million from $198.21 million on Wednesday.
The Naira began trading at N800.90/$ for the day before hitting a high of N1136/$ and N615/$ within the day. It eventually closed trading at N956.33/$.
Naira’s instability has persisted despite recent moves by the Central Bank of Nigeria (CBN) to clear the backlog of foreign exchange forward contracts.
The Nigerian currency is among the worst-performing in the world, losing about 40 per cent of its value since June, the World Bank recently disclosed.
Recently, the Economic Intelligence Unit, the research and analysis division of the Economist Group, disclosed that the CBN does not have the required firepower to clear the backlog of foreign exchange orders. This is expected to continue to put pressure on the Naira.
It stated: “In Nigeria, an unsupportive monetary policy implies that the naira will remain under pressure, while the central bank lacks the firepower to adequately supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors unnerved. High inflation and a continued spread with the parallel market will leave the exchange rate regime unstable and result in periodic devaluations”.
Source: The PUNCH
