The Nigerian naira has weakened further against the US dollar, reaching a low of N917 to a dollar on the black market, while the Investors’ and Exporters’ (I&E) window closed at N774.78/$. This marks a continuation of the naira’s decline in value, attributed to a high demand for foreign exchange and a shortage of dollars.
The depreciation of the naira has been a concern for analysts, who worry that the ongoing demand for foreign exchange may lead to further devaluation. The gap between the official exchange rate and the black market rate has been widening, driven by the inability of banks to meet the demand for dollars.
Experts point out that the major issue contributing to the slide in the naira’s value is the lack of adequate supply of dollars. The situation is exacerbated by the fact that many Nigerians are seeking to acquire dollars for essential expenses, such as tuition, medical care, and import bills.
Despite efforts to unify the naira’s exchange rate, the widening gap between the official and parallel market rates raises concerns about the effectiveness of the policy. The decline in Nigeria’s foreign exchange reserves, along with an influx of foreign currency from non-oil sources, has contributed to the current situation.
Economists and analysts express worry about the impact of this foreign exchange crisis on the Nigerian economy. They emphasize the need for increased supply of dollars and potential policy reviews to address the ongoing challenges.
Despite the challenges, rating agency Agusto & Co anticipates that Nigeria’s diaspora remittances will continue to play a significant role in the country’s economy. The agency predicts that remittances will increase to $26 billion by 2025, supported by improving economic conditions in advanced economies.
The depreciation of the naira, along with concerns about inflation and economic recovery, remains a critical issue for Nigeria’s policymakers and economic stakeholders.
