Naira Plunges Against Dollar, Government Adopts New Rate
Nigeria’s currency, the Naira, continued its downward spiral this week, hitting a new low against the US dollar in both official and unofficial markets. Data from FMDQ securities shows the Naira crashed to N1,479.47/$1 on Thursday, February 8th, representing a 4.3% depreciation compared to the previous day.
The decline extended to other major currencies, with the Naira weakening against the Pound Sterling and Euro as well. This depreciation adds pressure on Nigerian businesses and individuals who rely on foreign exchange for imports and international transactions.
Despite recent efforts by the Central Bank of Nigeria (CBN) to inject liquidity into the market, the Naira’s struggles continue. CBN Governor Olayemi Cardoso assured the Senate that their reforms will yield positive results soon, but concerns remain about the currency’s stability.
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Adding to the complexity, the federal government has adopted a new official exchange rate set by the CBN. This slight increase to N1,417.635 per dollar aims to bridge the gap between the official and parallel market rates, but its impact on overall stability remains to be seen.
Experts warn that the Naira’s depreciation could fuel inflation and increase the cost of living for Nigerians. Businesses may also face challenges importing goods, potentially leading to higher prices for consumers.
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The situation highlights the ongoing challenges facing the Nigerian economy and the uncertainty surrounding the Naira’s future. While the government and CBN take steps to address the issue, Nigerians brace themselves for potential economic consequences.
