In a startling turn of events, the Naira faced a catastrophic 42% drop against the US dollar within just two days, reaching an all-time low of N1,482.57 per USD on Tuesday, as reported by FMDQ. This marks a significant 9% loss compared to Monday’s closing rate of N1,348.63.
This recent plunge follows a disconcerting trend, with the Naira surpassing the N1,000 per US dollar threshold on multiple occasions, quoting N1,348.63, N1,099.05, and N1,043.09 per dollar on January 29 this year, December 8th, and 28th of the previous year, respectively. Additionally, the exchange rate experienced a 1.4% depreciation, settling at N1,470 per US dollar.
An alarming development is that, for the first time since the Naira’s floatation on June 14, 2023, the official market exchange rate has exceeded that of the parallel market by N12.57. Despite the Central Bank of Nigeria injecting N500 million into the forex market to clear verified forex backlogs and releasing an additional $64.6 million to address the forex backlog of foreign airlines, the Naira’s free fall against the dollar persisted.
Even after the CBN’s substantial injection of approximately $2 billion to settle outstanding commitments in key sectors like manufacturing, aviation, and petroleum, the Naira’s depreciation remains a cause for concern. The economic landscape is now grappling with the implications of this unprecedented drop, raising questions about the effectiveness of intervention measures in stabilizing the Naira.
As the situation unfolds, stakeholders and the general public anxiously await further developments and potential solutions to address the ongoing economic challenges.
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