Nigeria’s naira dived lower on Thursday to its record low of N1,400 against the greenback, despite the Central Bank of Nigeria’s (CBN) assurance to improve liquidity and enhance the value of the local currency.
On the parallel market, the local currency fell from N1350 to the dollar the previous day, while on the official market, the naira weakened against the dollar. At the I&E FX market, the naira depreciated as the dollar was quoted at N900.96 as against the previous close of N882.24.
According to the BDC operators, there is currently uncertainty as regards the price of the naira against the dollar due to high demand. The naira’s fall has persisted despite the best efforts of the CBN to save it, piling more pressure on the economy and the average Nigerian.
Recently, the apex bank announced it has released $2 billion as part of forex forward, while the Federal Government, through the Nigerian National Petroleum Company Limited, got a $2.25 billion oil-for-cash loan facility from the African Export-Import Bank to boost FX liquidity.
All these are yet to be reflected in the market. Commenting on the exchange rate recently, the CBN’s governor, Olayemi Cardoso, stated that there was an expectation that the foreign exchange market would stabilise in 2024.
Announcing other moves by the bank at the launch of the Nigerian Economic Summit Group 2024 Macroeconomic Outlook Report, the governor said, “I am pleased to note our collaboration with the Ministry of Finance and the NNPCL to ensure that all FX inflows are returned to the Central Bank.
“This coordinated effort will greatly enhance the bank’s FX flows and contribute to the accretion of reserves.” He added that the bank is implementing a comprehensive strategy to improve liquidity in the FX markets. Cardoso expressed the belief that the national currency is currently undervalued and, “coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term.”
