The Nigerian naira has experienced a significant depreciation of 38.9% against the US dollar at the official Investors and Exporters (I&E) window of the Central Bank of Nigeria (CBN) over the past three months, as reported by The PUNCH. Data from the FMDQ Securities Exchange indicates that the naira fell from N745.19/$ on October 3, 2023, to N1035.12/$ as of January 3, 2024.

This decline follows the CBN’s exchange rate unification policy announced in June 2023, which initially saw the naira drop from 471/dollar to about 700/dollar at the official market. However, it has since fallen further, surpassing N1000/dollar in recent months. In the parallel market, the naira has been trading around 1,220/dollar.

The depreciation of the naira has adversely affected the organized private sector, including manufacturers and small-scale industrialists, leading to scaled-down operations and potential job losses.JAMB Portal

Despite recent government efforts to improve foreign exchange (FX) market liquidity, including clearing FX backlogs and securing foreign exchange support facilities from the African Import-Export Bank, the naira’s value continues to fall.InformationGuideNigeria

In 2023, the CBN removed the rate cap on the naira at the official I&E window, allowing for a free float of the currency against the dollar and other global currencies. This decision was made following President Bola Tinubu’s promise to unify the nation’s multiple exchange rates and the suspension of CBN Governor Godwin Emefiele. Despite these measures, the naira has continued to weaken, with significant drops observed immediately following the policy’s implementation.NYSC Portal

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The World Bank has emphasized the need for Nigeria to control inflation and stabilize its foreign exchange market for economic growth. This includes removing import restrictions and improving infrastructure. The CBN Governor, Olayemi Cardoso, acknowledged the volatility issue and stated that the bank is comprehensively reviewing its policies to address it.JAMB Result

The ongoing foreign exchange scarcity and the naira’s continued depreciation are causing concern among members of the organized private sector, who fear further operational downturns and economic instability in Nigeria.

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