Naira crashes to all time low against US Dollar
– The Naira has crashed to a record low of N325 for USD1 on the parallel market.
– The slump comes amid concerns about the Naria’s devaluation and the global slump in crude oil prices.
– The CBN’s office exchange rate remains fixed at N197 for USD1.
The Naira has hit a record low of 325 to the US dollar on the parallel market as desperate importers scrambled for dollars to meet their obligations overseas.
The Naira closed at 318 against the dollar on Wednesday, after hitting 313.5 and 310 on Tuesday and Monday respectively.
“The dollar is falling because importers need forex to bring in their goods. They cannot keep on folding their arms because there is scarcity; they must keep buying; the only thing is that the quantity may reduce,” a forex dealer said.
The Central Bank of Nigeria (CBN) has continued to fix the Naira at N197 to the dollar.
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President Muhammadu Buhari believes that devaluing the Naira will hurt poor Nigerians, but the CBN’s refusal to revise the pegged exchange rate has ensured the official rate remains out of touch with reality.
Tumbling global oil prices have battered Nigeria’s oil-dependent economy, with external reserves down to an 11-year low at $27.89bn on February 9.
Last month, the central bank halted dollar sales to the BDC operators and allowed commercial banks to accept dollar deposits, in a failed effort to shore up dwindling foreign reserves.
Around 90% of Nigeria’s foreign exchange earnings come from crude oil exports, but mismanagement of refineries means the country must also import expensive refined fuel.
The Managing Director, Financial Derivatives Company Limited, Mr. Bismarck Rewane, said it was high time the CBN came up with a forex policy that would address the forex crisis confronting the nation.
“Nigerians are perplexed at the endless slide of their currency, which is now trading at N325/$, the lowest point ever,” he said.
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If you want to keep track of the issues and events that will effect the economy and the strength of the Naira, you can read our updates on the price of oil and the Naira – US Dollar exchange rate on the parallel market.
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