Nigeria Central Bank Faces Criticism as Naira Loses Ground, Now at N1,620/$

In a concerning economic development, the Naira faced a 1.25 percent depreciation against the US Dollar, reaching N1,620/$ at the parallel market on Monday. This marks a N20 decline from its trading rate of N1,600 on March 1, 2024. Bureau de Change (BDC) operators in Lagos quoted buying rates at N1,580 and selling rates at N1,620, indicating a profit margin of N40.

However, at the official window, the naira exhibited a contrasting trend, gaining 0.9 percent and trading at N1,534.19/$ on the same day. Data from FMDQ Securities revealed an intra-day trading high of N1,600.75 and a low of N1,425.35.

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, addressed the issue on February 28, attributing the naira's undervaluation to distortions in the foreign exchange market. Cardoso emphasized the CBN's commitment to rectifying these distortions, pledging corrective actions against any wrongful practices. He stated, "As and when we come up with these distortions, we will take them off and throw them away," indicating a determination to stabilize the FX market.

As the nation navigates these currency challenges, economists and financial experts anticipate further insights into the factors influencing the Naira's depreciation and the CBN's strategies to restore stability.