The Nigerian naira exchange rate was mixed across various foreign exchange markets on Monday.
The naira weakened by 0.41 per cent against the dollar at the parallel market, closing at N741. At the same time, it strengthened by 0.38 per cent against the dollar at the investors’ window, closing at N462.25/dollar.
However, the interbank segment saw the naira’s value remaining flat, closing at N460.93/dollar. Similarly, in the P2P category of the forex market, the naira lost value, weakening to N743.4 on Monday compared to Sunday’s exchange rate of N741.1.
Economists such as Professor Akpan Ekpo have noted the need for the Central Bank of Nigeria (CBN) to close the gap between the official and black market rates.
According to him, the gap is too wide, and the CBN must take action to narrow it down. He suggested that the economy must diversify to generate foreign exchange from non-oil products to close the gap between the two rates.
Recently, Nigeria’s inflation rate for March 2023 surged to 24.45 per cent, according to the National Bureau of Statistics. As a result, the CBN may increase the Money Policy Rate to combat inflation, as seen in the past.
The inflation rate rose due to increases in food inflation caused by the high prices of oil and fat, bread and cereals, potatoes, yam and other tubers, fish, fruits, meat, vegetables, and spirits.
Overall, the naira’s performance in the currency market reflects the country’s economic challenges. The CBN must implement measures to address these challenges and stabilize the naira’s value to maintain economic growth and stability.