The naira plunged to an all-time low of N925/$1 on the black market on Wednesday, as the demand for foreign currency continued to outstrip the supply.
This was confirmed by Mohammed Gazali, a forex trader in Zone 4 Abuja, who said that the dollar was trading between N880 and N890 in Lagos.
The official market was not spared from the forex crisis, as the exchange rate closed at N757.81/$1 in the Investor and Exporter Window, while the NAFEX rate was N776. The official market also faced supply constraints, with daily turnover averaging $80 million since July 1.
The forex crisis has been ongoing since the Central Bank of Nigeria (CBN) liberalised the forex window on June 14, allowing the exchange rate to be determined by market forces. However, this has led to volatility and uncertainty in the market, as the naira has depreciated by over 50% since then .
President Bola Ahmed Tinubu, in his July 31 broadcast to Nigerians, said that the government would intervene in the forex market when necessary. He also urged Nigerians to be patient and patriotic, as the government was working hard to address the economic challenges facing the country.
The acting CBN governor Folashodun Shonubi also stated that efforts were underway to address forex volatility at July’s Monetary Policy Committee meeting. He said that the CBN was working with other stakeholders to improve liquidity and transparency in the forex market.
The depreciation of the naira is likely to have a number of negative consequences for the Nigerian economy. It will make it more expensive to import goods and services, which will lead to higher inflation. It will also make it more difficult for businesses to export their products, which will hurt economic growth.
The government needs to take urgent action to address the economic challenges facing Nigeria, including the depreciation of the naira. Otherwise, the country could face a serious economic crisis.