On Wednesday, the Nigerian naira fell to a new low of N1,610 against the US dollar on the parallel market, commonly known as the black market. This marks a significant drop from the previous trading rate of N1,605, as traders in Lagos struggle with a continued scarcity of dollars.
In some parts of Lagos, street traders are purchasing dollars at rates as low as N1,600 and reselling them at N1,610. This situation has led to a N5 loss compared to the rates observed over the past three trading days. The last time the dollar was quoted at N1,610 was on July 30, 2024.
The scarcity of the dollar in the market is contributing to the naira’s decline.
The naira’s decline has been notable over the past few days. On Tuesday, the naira lost 0.81 percent, with the dollar quoted at N1,592.06 compared to N1,579.22 on Monday, according to data from the Nigerian Autonomous Foreign Exchange Market (NAFEM), as reported by the FMDQ Securities Exchange Limited.
The Federal Government of Nigeria, through the Debt Management Office (DMO), recently introduced a tax-exempt bond valued at $500 million. This bond, which has a one-year tenor, was offered to both local and international investors.
The persistent decline of the naira and the current scarcity of dollars pose significant challenges for Nigeria’s economy. For businesses and individuals relying on foreign currency, the rising cost of dollars can lead to increased operational expenses and inflationary pressures. Additionally, the continued depreciation of the naira affects the purchasing power of Nigerians and can lead to higher costs for imported goods and services
