The Naira, Nigeria’s currency, has continued to lose value against the dollar, as it exchanged at 980/$ at the parallel market on Wednesday.
This is a significant drop from 920/$ on Monday, according to a Bureau De Change Operator in Zone 4 Abuja, Ahmed Gazali. He said the situation is fluctuating and unpredictable, and blamed it on the forex scarcity.
The forex scarcity is a result of the low supply of foreign exchange from the Central Bank of Nigeria (CBN) and other sources, such as remittances, oil exports, and foreign investments.
The demand for forex, however, remains high, as importers, manufacturers, and individuals need dollars to pay for goods and services.
The CBN had introduced reforms on June 14 to unify the forex market and ease the pressure on the Naira. The reforms included the removal of the official exchange rate of 379/$ and the adoption of the NAFEX rate of about 410/$ as the benchmark. The CBN also increased the allocation of forex to banks and Bureau De Change operators to meet the needs of customers.
However, the reforms have not been able to address the forex crisis, as the Naira has continued to depreciate at both the official and parallel markets. At the official window, the Naira closed at 770.71/$ on Wednesday, slightly appreciating from 776.76/$ on Tuesday. This is still far from the NAFEX rate of 410/$ that the CBN had adopted.
The forex crisis has implications for the Nigerian economy, as it affects inflation, production, trade, and consumer welfare.
The CBN has assured that it is working to stabilize the forex market and restore confidence in the Naira.
However, some experts have called for more structural reforms and diversification of the economy to reduce dependence on oil and forex.