The Nigerian Naira remained at a historic low of 1,300 Naira per US dollar on the parallel market as low dollar liquidity amid rising demand continues to drag on the local currency value.
The unnerving development was revealed on Thursday as the online platform, abokiFX, showcased the grim milestone.
This devaluation comes as a consequence of various factors, including reduced trading activity on the black market and persistent dollar shortages in the official market.
It accentuates the Naira’s unrelenting depreciation in the unofficial market since the removal of currency restrictions on the official foreign exchange market.
Merely a month ago, the Naira had surpassed the 1,000 Naira per dollar mark on the black market, underscoring the country’s deteriorating financial stability.
Amid these challenging circumstances, Nigeria’s Central Bank Governor, Yemi Cardoso, assured the public that the Naira would adjust once the regulatory framework for market participants became more transparent.
This attempt to reassure the market offered some respite, with the official market rate rebounding from its all-time low of 999 Naira per dollar last week, recovering to 775 Naira per dollar.
Finance Minister Wale Edun shared that Nigeria was anticipating foreign currency inflows of around $10 billion in the coming weeks.
These inflows are expected to ameliorate liquidity concerns in the foreign exchange market, resulting from instrument issuances in dollars, revenue from oil sales, and foreign investments.
While the prospect of increased foreign exchange inflows has somewhat slowed the Naira’s depreciation on the official market, the black market rate continues to experience a plunge due to limited trading activities.