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Naira in Freefall: NAFEM Reports Alarming Closing Rate of N956.33/$, Signals Ongoing Currency Crisis

November 23, 2023

 

 

 

 

Photo Credit: Nairametrics

 

The naira fell to a new low on Thursday, closing at N956.33 per dollar in the official market and N1165 per dollar in the parallel market.   

The domestic currency depreciated 12.11% to close at N956.33 to a dollar at the close of business on Thursday, data from the NAFEM where forex is officially traded, showed.   

  • This represents an N115.8 loss or a 12.11% decline in the local currency compared to the N840.53 it closed on Wednesday and a new all-time low per the Nairametrics tracker. The last all-time low was N996.75 recorded on November 9th. 
  • The intraday high recorded was N1136/$1, while the intraday low was N615/$1, representing a wide spread of N521/$1.   
  • According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $105.50 million, representing a 46.77% decrease compared to the previous day. 
  • Similarly, the naira weakened at the parallel forex market where forex is sold unofficially, the exchange rate depreciated by 1.29%, quoted at N1165/$1, while peer-to-peer traders quoted around N1148.44/$1.    

What the expert is saying

Amid the rising free fall of the Naira both at the official Nigerian Foreign Exchange Market (NAFEM) and the unofficial market, financial experts had called on the Central Bank of Nigeria (CBN), to de-dollarise the economy by declaring any local transactions in the US dollars illegal.  

Speaking on strategies that can be used for the naira to regain strength, the founder and chief consultant of B. Adedipe Associates Limited (BAA Consult), Dr. Biodun Adedipe, said the CBN should stop government agencies from charging local operators and entities in US dollars.  

According to him, the sale of crude oil to local refineries should also be made in Naira rather than in US dollars.  

  • Adedipe said: “CBN should deal transparently with participating banks at the I&E Window. De-dollarize the economy by declaring as illegal any local transactions in US dollars (sale of assets, rent/leases, and other services, including school fees and medical bills) and ensure that government agencies stop charging local operators and entities in US dollars (quite common in the maritime sector). 
  • “Other suggestions include the need to ensure that the sale of crude oil to local refineries should be made in Naira rather than dollars. “ 
  • “President Bola Tinubu should have a direct engagement with bank CEOs to generate ideas and use moral suasion to enlist their support for the market reforms. Face the reality that unified exchange rates (not any different than floating the Naira) is a poor policy choice for a structurally defective and weak economy like ours,” he added. 

 

 

Credit : Nairametrics

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