Nigeria’s Currency Struggles Against Dollar Amidst Economic Challenges.
Nigeria’s currency, the Naira, continues to experience a sharp decline against the Dollar, intensifying concerns about the nation’s economic stability. This downward spiral has persisted for two months following the Central Bank of Nigeria’s (CBN) decision to float the Naira, exacerbating the challenges facing Africa’s largest economy.
- Latest Dollar to Naira Black Market Exchange Rate Today – August 15, 2023
- CBN Official Naira to Dollar exchange rate today August 15, 2023
Since the CBN’s liberalization of the forex market on June 14, the Naira has shown a steady decline against the Dollar. The exchange rate at the parallel market, commonly referred to as the black market, has slid from N750/$1 to N950/$1 as of Monday, August 14, 2023.
Alarming as this is, the situation is further exacerbated by a widening gap between the official exchange window and the parallel market, with a significant differential of N181. This development counters the intended effects of the CBN’s decision to float the Naira.
Adding to these complexities is an ongoing investigation into the apex bank by special investigator Jim Obazee, appointed by President Bola Ahmed. Experts familiar with the sector suggest that this probe may have contributed to the Naira’s depreciation.
Recent details released from the CBN’s consolidated financial statements spanning seven years reveal a combined debt of $7.5 billion owed to JP Morgan and Goldman Sachs, alongside a foreign reserve of $33.88 billion. This combination of factors, according to economist Prof Uche Uwaleke, is a driving force behind the persistent forex crisis.
Acting CBN Governor Folashodun Shonubi, however, attributes the woes in the sector to undocumented forex remittances and the unregulated parallel market. Consequently, Nigeria’s economy, heavily reliant on fuel, continues to grapple with the repercussions of the forex crisis.
Oil marketers have hinted at the possibility of further petrol pump price hikes, mirroring the escalating Dollar price. This could further burden the masses, who are still reeling from the fuel price increase in July following the removal of petrol subsidies in June.
President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, spoke with Newsmen on Monday, stressing that their members shouldn’t be held responsible for the ongoing forex market crisis. He pointed to unlicensed online platforms operating across different jurisdictions, lacking standardized regulations for diaspora remittances and affecting the official market.
Gwadabe emphasized the importance of having CBN-authorized agents for diaspora remittances, thereby blocking potential loopholes and alleviating the forex crisis.
Idakolo Gbolade, Chief Executive Officer of SD & D Capital Management, attributed the Naira’s continuous decline to reduced forex inflows into the economy, leading to foreign currency scarcity. He pointed out that major oil companies, establishments, and commercial banks contributed to the crisis by fostering increased scarcity for their own gain.
Gbolade urged the government to implement policies that would halt further deterioration in the sector, emphasizing the connection between the forex crisis, rising inflation, and the high cost of living.
As the Naira’s value remains in a precarious position, Nigeria faces critical decisions to stabilize its currency and tackle the underlying economic challenges.
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