The Nigerian Naira witnessed a further decline in its value against the US Dollar across all foreign exchange markets on Thursday, October 5, 2023. This concerning trend comes amidst persistent supply challenges and a lack of clear direction from the new management team at the Central Bank of Nigeria (CBN).
Despite the Senate’s confirmation of the new CBN Governor, Mr. Yemi Cardoso, and four deputy governors, there has been no significant introduction of new foreign exchange (FX) policies. Consequently, the market has been grappling with uncertainty and reacting accordingly.
Data from FMDQ Securities revealed that at the Investors and Exporter window, which represents the official market, the Naira closed at N775.20 against the US Dollar on Thursday. This marks a 2.51% depreciation in value compared to the rate of N756.21/$1 observed on Wednesday, October 4, 2023.
Meanwhile, in the Peer-to-Peer section, primarily used by cryptocurrency traders and fintech enthusiasts, the Naira’s exchange rate against the US Dollar also dipped. On Thursday, it was recorded at N1,009/$1, a slight decrease from the previous day’s rate of N1,005/$1.
Dollar Shortage Hits Commercial Banks As Naira Drops Further
Similarly, in the parallel market, the Naira continued to lose value against the US Dollar. The exchange rate stood at N1,001/$1 on Thursday, maintaining the same rate as Wednesday’s N1,000/$1.
For the Pound Sterling, the CBN reported that the Naira closed at N927.40/£1, in contrast to the previous rate of N904.75/£1.
Against the Euro, the Naira experienced a decrease in value by N17.95, selling at N801.81/€1, as compared to Tuesday’s rate of N783.86/€1.
This ongoing depreciation of the Naira against the US Dollar and other major currencies is raising concerns within the Nigerian financial landscape. The lack of clear FX policies from the new CBN leadership has left the market in a state of flux, with investors and traders closely monitoring developments.
In a separate report, the World Bank has ranked the Naira as one of Africa’s worst-performing currencies. The reasons behind the Naira’s poor performance against the US Dollar are attributed to various economic factors.
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