Naira Plummets to N945/$1 in Parallel Market as IMF Faults Nigeria’s Policies

The Nigerian currency, the Naira, continued to lose value against the US dollar in the parallel market on Thursday, reaching a record low of N945/$1 in Abuja. This was a significant decline from the previous day’s rate of N925/$1.

Meanwhile, on the official market known as the Investors and Exporters (I&E) window, the Naira closed slightly lower at N781/$1, compared with its opening rate of N782/$1.

The International Monetary Fund (IMF) attributed the Naira’s depreciation to Nigeria’s inadequate fiscal and monetary policies, which created excess liquidity in the economy.

The IMF said that Nigeria needed to tighten its policies to stabilize the exchange rate and curb inflation.

The IMF also said that the Central Bank of Nigeria’s (CBN) decision to float the Naira in July has not helped matters. The CBN’s decision to allow the Naira to trade freely has led to increased volatility in the currency market.

Newsflash Nigeria had reported that the Central Bank of Nigeria (CBN) floated the Naira on July 14, hoping to ease the pressure on the foreign exchange market and attract more foreign investors.

However, the move did not yield the desired results, as the Naira remained volatile and weak against the dollar.

The Acting CBN governor, Folashodun Shonubi, said that the bank was working to address the pent-up demand for foreign exchange, which had accumulated due to the COVID-19 pandemic and other factors. He assured that the CBN would continue to intervene in the market to ensure liquidity and stability.

The depreciation of the Naira is having a negative impact on the Nigerian economy. It is making it more expensive for businesses to import goods and services, which is driving up inflation. It is also making it more difficult for Nigerians to travel abroad.

The CBN has said that it is committed to stabilizing the Naira. However, it is unclear how the CBN will be able to do this in the current environment of loose fiscal and monetary policies.

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