The naira has now been classified as the third worst-performing currency in the world, following a staggering 70% depreciation against the dollar this year.
As of Monday, the naira weakened by 4.3%, reaching an unprecedented low of 1,670.65 naira per dollar, according to Bloomberg data.
This sharp decline has been attributed to a severe 72% drop in dollar liquidity, which fell to just $81 million, the lowest level in over a month.
The crisis in the foreign exchange market has intensified volatility, hindering Nigeria’s efforts to stabilize its currency amidst fluctuating oil production and foreign exchange inflows.
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Finance Minister Wale Edun recently addressed the challenges, emphasizing that increasing crude output is crucial for enhancing Nigeria’s foreign exchange reserves and stabilizing the naira.
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“We must focus on boosting oil production to support our currency and reserves,” Edun stated, reflecting the government’s urgent need to tackle these economic hurdles.
Experts warn that the naira’s downward trend is alarming, particularly as the parallel market exchange rate hit ₦1,740/$1 over the weekend.
In contrast, the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed slight stability and even appreciation, with market participants speculating that the Central Bank of Nigeria (CBN) may intervene soon to relieve pressure on the exchange rate.
