The Nigerian currency, the Naira, suffered another setback on Thursday as it fell to N956.33 against the US Dollar on the official foreign exchange market.
This represents N111.8 depreciation from the previous day’s rate of N830.97/$1, according to data from FMDQ. This is the third consecutive day that the Naira has lost value on the official market since last week.
The Naira also weakened on the parallel market, where it traded at N1,170/$1 on Thursday, down from N1,135/$1 on Wednesday.
The parallel market reflects the rate at which the currency is exchanged by individuals and businesses outside the official channels. The widening gap between the official and parallel rates indicates the persistent scarcity of foreign exchange in the country.
The Naira’s decline comes despite an increase in the country’s Forex turnover by 61.86 per cent to $198.21 million on Tuesday.
The forex turnover measures the amount of foreign currency that is traded in the interbank market. A higher turnover implies more liquidity and availability of forex.
The Central Bank of Nigeria (CBN), which is responsible for managing the country’s exchange rate policy, has been facing challenges in stabilizing the Naira since it introduced a series of reforms in June this year.
The reforms aimed to unify the multiple exchange rates and improve transparency in the forex market.
However, the reforms have been met with skepticism and criticism by some stakeholders, who accuse the CBN of devaluing the Naira and creating more confusion in the market.
The CBN governor, Dr Olayemi Cardoso, is expected to unveil the apex bank’s economic outlook and Monetary Policy Committee direction on Friday at the Chartered Institute of Bankers of Nigeria (CIBN) 50th-anniversary event.
The CBN governor has failed to hold a Monetary Policy Committee meeting for the second time in two months, raising concerns about the state of the economy and the direction of the monetary policy.
The Monetary Policy Committee is the highest decision-making body of the CBN, which sets the benchmark interest rate and other monetary policy parameters.