Naira Depreciates Further as Residents Stockpile Dollars Amid Currency Turmoil
Nigeria’s Currency Faces Significant Depreciation
In a significant development, Nigeria’s currency, the naira, has experienced a sharp depreciation of nearly 5% against the US dollar in the parallel market. This comes after a record low in the country’s official currency market, leading to a surge in residents stockpiling dollars, particularly in Lagos.
Exchange Rate Plummets, Furthering Economic Concerns
The exchange rate of the naira has fallen from 1,052 to 1,110 per dollar, according to Abubakar Mohammed of Forward Marketing Bureau de Change Ltd., who closely monitors informal currency trading. This depreciation follows an earlier 8.9% drop in the official market, where the naira reached an unprecedented low of 848.12 under President Bola Tinubu’s administration. Since May, when the nation’s foreign-exchange market was pledged to be unified, the naira has plunged more than 40%.
Import Restrictions Lifted, Amplifying Dollar Demand
The situation worsened when import restrictions on 43 items were lifted, resulting in escalated dollar demand in the parallel market. These policy changes have created a ripple effect throughout Nigeria’s economy, leaving residents grappling with the rapidly changing value of their currency. Financial institutions and policymakers are closely monitoring this ongoing situation.
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