The Naira has plummeted to an all-time low of N1,534.39 against the US dollar on Monday.
This sharp decline comes amidst a surge in demand for the American Dollar.
Data from the Nigerian Autonomous Foreign Exchange Market (NAFEM) revealed that the Naira lost 4.19 percent of its value in a single day from the N1,469.97 rate recorded just last Friday.
At the parallel market, popularly known as the black market, the naira also depreciated by 1.33 percent against the dollar to N1,505 from N1,485 it closed on Friday.
Street traders and currency exchange operators attribute the scarcity of dollars to restrictions imposed by the Central Bank of Nigeria (CBN), which has tightened controls on the avenues through which foreign currency can be obtained.
These measures, designed to curb illicit financial activities, have inadvertently contributed to the shortage of dollars and exacerbated the Naira’s decline.
The International Monetary Fund (IMF) has also raised alarms about Nigeria’s dwindling foreign reserves, projecting a decline to $24 billion by 2024.
With reserves already standing at a precarious $3.11 billion as of February 8, 2024, concerns regarding the country’s economic outlook are mounting.
Furthermore, recent regulatory changes introduced by the CBN, particularly concerning inbound money transfers, have added to the uncertainty surrounding the Naira’s stability.
The revised guidelines, which restrict the operations of International Money Transfer Operators (IMTOs) and mandate inbound transfers to be paid exclusively in Naira, reflect efforts to enhance financial oversight but have implications for currency liquidity and exchange rates.
As Nigeria grapples with these challenges, stakeholders are closely monitoring developments amid fears of prolonged economic instability and its ramifications for businesses and consumers alike.
