Recession: Naira crashes further, Nears N500/$1 On Parallel Market

Nigeria’s national currency and unit of exchange, Naira, reportedly crashed further on Thursday by N8 against the dollar.

The Naira’s dramatic fall with telling effect on the exchange, now hovers around the rate of N500/1$ to N495/$1 on Thursday.

This was against the previous day’s exchange rate of N487 per dollar. Recall that  the Naira which exchanged exactly at N450/$1 on Thursday, had gone for N484/$1 at the preceding weekend.

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However, referencing some dynamics and  data  from “Abokifx,” a digital platform focusing on forex rates on the parallel market, media reports had indicated that not withstanding  the fact that trading had opened earlier in the day on Wednesday with the naira  standing at N487/$1, it crashed against the greenback to close at N495/$1.

Curiously, the Nigerian naira, which  has maintained some relative  stability previously at the Investors and Exporters’ (I&E) window, it depreciated within that investment dynamics of the forex window on Thursday by exchanging at N393.25 per dollar from its ranking of N388.15/$1 the preceding day.

Recall that  the naira has been under intense economic and financial pressure in recent times especially at the parallel market following scarcity of foreign exchange. This was occasioned in  part by the drastic fall in Oil price price. Oil revenue alone  accounts for about 94 % of Nigeria’s externally generated earnings.

The Central Bank of Nigeria  had in the first quarter of the year put off  its weekly sale of forex to Bureau De Changes following  the suspension of global  flights into Nigeria and other COVID-19 designated strategies to contain the  pandemic as unveiled by the Nigerian government.

Other contending factors that may have had negative impact on the Naira, according to experts have to do with seasonal logistical movements by this end of the year wherein many people naturally expend resources on importation and purchase of foreign made seasonal items. This usually trigger more demand on the dollar thereby putting much pressure on domestic currency.

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