Naira Depreciates To 1,530/$1 At Parallel Market As Shortage of Dollar Continues

The Nigerian currency, the naira, continues its downward spiral, hitting a new low of 1,530 against the dollar on the black market.

This marks a significant drop compared to the previous rate of 1,515 recorded just a day earlier.

Analysts attribute this latest decline to a scarcity of dollars caused by foreign investors pulling their funds out of the country. “The shortage of dollars is putting immense pressure on the naira,” says financial expert, Dr. Ayo Adesanya. “Investors are losing confidence in the Nigerian market, leading to this downward trend.”

Trading at the Nigerian Autonomous Foreign Exchange Market (NAFEM) also witnessed a dip, with the naira weakening by 0.79% against the dollar. This trend is worrying for both investors and ordinary citizens alike, as it affects the purchasing power of the local currency.

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Despite efforts by the Central Bank of Nigeria (CBN) to stabilize the exchange rate, including recent hikes in the monetary policy rate (MPR), the naira’s value continues to slide. “The CBN’s interventions have had some temporary effects in the past, but they seem insufficient to tackle the current challenges,” notes economic analyst, Dr. Funke Williams.

The recent appreciation of the naira from mid-March to mid-April provided a glimmer of hope, but this latest decline underscores the volatility of the currency. “We need more sustainable measures to shore up the naira and restore confidence in the market,” adds Dr. Williams.

In light of the ongoing situation, experts anticipate the CBN might adopt a more stringent approach to stabilize the naira. “The CBN could maintain its hawkish stance to bolster the exchange rate,” suggests Dr. Adesanya. “However, such measures may come with their own set of challenges for the economy.”

As stakeholders await further developments, there’s a growing sense of uncertainty regarding the future trajectory of the naira. “We’re in a delicate situation,” remarks financial analyst, Mr. Tunde Adekunle. “It’s crucial for policymakers to act decisively to prevent further erosion of the naira’s value.”

With the fate of the naira hanging in the balance, all eyes are on the CBN and other relevant authorities to implement effective strategies to stabilize the currency and restore confidence in the Nigerian economy.