The Nigerian naira plummeted to N1089.51 against the dollar on Tuesday, marking a staggering 27.19% drop from its Monday closing rate of N856.57/$, as reported by the FMDQ Securities Exchange.
The day saw the naira fluctuating between highs of N1251/$ and lows of N720/$ before settling at N1089.51/$ at day’s end, with a total forex turnover of $97.45m.
This is the fourth instance of the naira closing below N1,000 on the official window, the second-lowest since the removal of the rate cap by the Central Bank of Nigeria.
Despite the Central Bank’s efforts to clear matured foreign exchange obligations, including the disbursement of $2bn and disclosure of pending obligations of $7bn in forward contracts, the naira’s continuous decline persists.
This depreciation comes even amid government initiatives, such as a $2.25bn foreign exchange support facility received from the African Import-Export Bank, aimed at resolving FX shortages.
Economic experts, like Dr. Ayo Teriba, attribute the naira’s volatility to insufficient foreign exchange supply, dwindling reserves, and unmet government promises on investments.
Teriba expresses hope that government actions such as opening to investors and fast-tracking initiatives like taking the NNPC to the market could help alleviate the FX shortage, stabilize the naira, reduce inflation, and improve living standards.
He emphasizes the need to build reserves to fortify the FX market for sustained stability.
