The United States dollar demand pressure on Tuesday forced down the exchange rate of naira to dollar at both the official and parallel market foreign exchange windows.
At the parallel market, the naira depreciated to N1,625/$1 from N1,620 to the dollar it closed at, the previous day.
Also, there was a substantial decline of the local currency, reaching a low point of N2050 per Great Britain Pound (GBP), reflecting persistent demand pressures that have contributed to the erosion of the currency’s value.
This signifies a significant decrease of 7.32 percent or N150 compared to the rate of N1,900 recorded the previous day.
At the official window, the naira depreciated to N1,602.43/$1 as against N1,534.19/$ on Monday according to data from FMDQ.
Market analysts attribute the recent decline to a consistent surge in demand for dollars that has been evident since January.
The recent decline in the Naira’s value across official and parallel markets has prompted suggestions from financial experts to mitigate currency volatility and prevent further depreciation.
The CBN had announced a series of measures aimed at enhancing transparency and stability in the foreign exchange market while addressing malpractices.
Nigerian Tribune had earlier quoted an economist and investment Banking Executive Dr. Nnaemeka Onyeka Obiaraeri as saying that Nigerians have not taken urgent steps to address the corruption demand for the dollar which is at the root of the country’s problems.
He added that politicians are stockpiling the dollars in order to use them for bribery during the next election circle to retain power and continue the looting and some for buying properties abroad.
According to Obiaraeri, these policies that CBN has put in place are neo-liberal classical economic theories that would have worked in economies where 95 to 98 percent of economic activities are captured in the formal sector.
Nigeria does not meet some of the assumptions that drive some of these economic theories that they are putting in place. The solution lies in producing locally, those items that the country import as well as local refining of petroleum products, he stated.
