By John Ikani
The Nigerian Naira reached an unprecedented low against the United States dollar in the unregulated market on Thursday, according to currency traders nationwide.
In specific areas like Lagos’ Ikeja zone, the dollar exchanged at N935.00, while dealers in Abuja reported a rate of N950.00 per $1 on Thursday, compared to N915 and N920.00 in the previous session.
Uyo traders echoed the trend, with the dollar trading at N938.00 to N940.00 per dollar on Thursday, fueled by increased demand.
However, the Naira exhibited a slight recovery against the dollar within the Investors and Exporters (I&E) window, as data on the FMDQ website indicated.
Economist Razaq Fatai, based in Abuja, attributed the currency’s decline to a scarcity of dollars in the face of surging demand.
Fatai highlighted the longstanding reliance on three sources for Nigeria’s foreign exchange – crude oil exports, remittances, and investments. He noted that all three channels, especially crude oil exports, have faltered in meeting the growing demands.
“Crude oil production for H1 this year, at 1.2 million barrels per day (mbpd), is significantly below our historical average of 2.2 mbpd and the OPEC quota of 1.74 mbpd,” he pointed out.
Fatai emphasized that the dwindling trust in the local currency has pushed Nigerians towards favoring the US dollar for savings.
He proposed a strategic shift to stabilize the exchange rate, focusing on boosting exports by increasing oil production and supporting non-oil exports. “Curbing oil theft is pivotal in raising production levels. Simultaneously, streamlining non-tariff trade barriers for non-oil commodities is vital,” he asserted.
Meanwhile, official window data from Thursday revealed the Naira closing at N781.34 compared to N782.38 per $1 on Wednesday.
This represents a 0.13% uptick from the previous session’s N782.38 per $1 on Wednesday.
