Nigerian currency, the Naira, has hit a record black market low in history, exchanging of N1,160 to the dollar on Friday, according to a global forex trader – AbokiFx
This depreciation comes just days after the official market also recorded a new low of N980 to the USD. Dollar earning is low in Nigeria and consequently in short supply and weakening the Naira.
The freefall of the naira in the unofficial market has been exacerbated by the removal of currency restrictions on the official market. These restrictions had previously propped up the Naira’s value.
The Nigerian Central Bank had announced plans to intermittently intervene in the foreign exchange market to bolster liquidity, following the lifting of an eight-year ban on 43 items from accessing dollars on the official market by the previous regime.
Last month, the Naira had already surpassed the N1,000 naira per dollar mark on the black market. This continued devaluation is largely driven by excess dollar demand from the official market spilling into the informal market.
Analysts say there are no fundamental macro-economic indicators to suggest that this trend could reverse soon in a low productivity economy like Nigeria. But an escalation of war in the Middle East could boost global oil price and provide more dollar earnings to Nigeria which may in turn firm up the Naira.
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