Professional Web Design

Nigeria’s central bank struggles to stabilize Naira as it hits record low against Dollar

December 3, 2023
Nigeria's central bank struggles to stabilize Naira as it hits record low against Dollar

's official market witnessed a significant drop in the value of the naira against the on Friday, reaching a record low and mirroring rates observed in the unofficial parallel market.

According to data from the Stock Exchange Group the currency of Africa's largest economy tumbled to 1,160 naira to the dollar before recovering to approximately 800 naira.

The official exchange rate of the naira has been gradually approaching the level seen in the parallel market, a trend attributed to the central bank's struggle to settle outstanding foreign currency amounts from forward deals.

Despite efforts to stabilize the currency, the naira's fluctuation highlights the challenges facing Nigeria's economic landscape.

Last week, the Central Bank Governor, Olayemi Cardoso, addressed concerns over the exchange rate, expressing a commitment to allowing market forces to play a role in determining rates.

Governor Cardoso emphasized the importance of establishing clear, transparent, and harmonized rules governing market operations to foster stability.

The recent volatility in the official market has raised questions about the effectiveness of the central bank's measures to maintain a steady exchange rate.

The naira's decline to 1,160 against the dollar, a record low, underscores the urgency for comprehensive strategies to address underlying economic challenges.

While the naira managed to recover to around 800 naira, the parallel market reflected a similar trend, with the currency trading at approximately 1,165 naira against the dollar on Friday.

This parallel market rate indicates the persistence of disparities between official and unofficial exchange rates, contributing to economic uncertainties.

Latest from Africa