The exchange rate between the Nigerian naira and the US dollar plummeted to an all-time low of N983/$1 in the black market, according to data from Nairametrics. This represents a 2.93% drop from the previous day's rate of N955/$1 and a significant depreciation from the N950/$1 rate observed just last week.
The foreign exchange crisis in Nigeria continues to escalate, with currency traders citing a severe shortage of dollars to sell. Despite various policy pronouncements by the Central Bank of Nigeria (CBN) aimed at stabilizing the foreign exchange market, the situation appears to be worsening.
In mid-August, the naira had briefly traded as low as N955/$1, raising concerns among investors that it might reach the alarming rate of N1,000/$1. However, the rate had temporarily improved to N840/$1 after the CBN warned speculators of potential major losses due to forthcoming policy changes.
A top official of the Association of Bureau De Change Operators of Nigeria (ABCON) expressed the dire situation in the forex market, noting that many licensed operators are unable to secure sufficient dollars for transactions, effectively rendering them out of business. He attributed the crisis to a scarcity of dollars, which has led to the proliferation of parallel or black market rates.
The official further explained the complexity of the market, with various rates emerging from platforms like Binance, Dubai, and the local parallel market. The scarcity of dollars has left licensed operators like him confused and uncertain about how to proceed.
The continued depreciation of the naira and the forex crisis highlight the challenges facing Nigeria's economy and the urgent need for effective policies to address these issues.
