Naira Plummets to N1,600 per Dollar in Official Market

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The value of the naira has taken a significant hit, dropping to N1,600 per dollar in the official foreign exchange market. This marks a notable decline from its stable position around N1,500 for the past three months, sparking concerns among investors and economists.

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According to data from the Central Bank of Nigeria (CBN), the official exchange rate has moved up from N1,569 to N1,600, representing a decline of N31 in the naira’s value. This shift has raised concerns about the country’s economic stability, particularly in the face of dwindling foreign reserves

In the black market, the naira has also weakened, trading at ₦1,565 per dollar compared to ₦1,555 the previous day. As a result, the gap between the official and parallel market rates has widened to N35, up from N14 on Thursday. This growing disparity may have implications for Nigeria’s foreign exchange dynamics, potentially leading to increased demand for dollars in the parallel market.

The naira’s decline is likely to put pressure on the CBN to intervene in the foreign exchange market, potentially through sales of dollars to stabilise the currency. However, with the country’s foreign reserves dwindling, the CBN’s ability to intervene may be limited.