The Nigerian Naira extended its decline against the United States Dollar on the parallel market popularly known as the black market.
The local currency was exchanged at N1235 to a United States dollar on Monday, a further decline from the N1200 it traded in the early hours of the day.
Economic uncertainty amid complex and unclear policy has dragged on Africa’s largest economic productivity as local businesses continue to struggle to access necessary forex for the importation of raw materials in a nation that depends on importation most of its consumption.
The local currency plunged by over 200% against the United DOllar on the black after President Bola Ahmed Tinubu removed fuel subsidies and immediately free-floated the Nigerian Naira in June.
Since the policy adjustments, the inflation rate has risen to 26.72%, the highest in over two decades. The unemployment rate continues to rise with the increase in the number of businesses shut while household income and consumer spending have dropped with the plunge in economic productivity.
President Bola Tinubu on Monday announced plans to pay $13 billion in foreign exchange obligations in order to improve dollar liquidity and prop up the value of the Nigerian naira against the United States Dollar.
He said “All foreign exchange future contracts will be honoured by this government. I assure you we have a line of sight to the foreign exchange we need to refloat this economy. And we will get it.”
This was after the Governor of the Central Bank of Nigeria, Olayemi Cardoso, had said the apex bank is working towards settling all foreign exchange obligations in September.
“We need to promptly find a way to take care of that. It would be naive for us to expect that we’ll be making too much progress if we’re not able to handle that side of the foreign exchange market,” he said.