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Nigeria’s naira falls to record low of N1,490/$1 at the official market

In a worrying turn of events, the Naira has continued its downward spiral, reaching an alarming record low of N1,4900 per dollar on the official market. This situation is unprecedented, marking the lowest point in the Naira's historical performance amid ongoing efforts by the Central Bank of Nigeria (CBN) to address the backlog of verified foreign exchange transactions.

Nigeria’s naira hits new lows vs dollar at official market
  • According to FMDQ Exchange data, the Naira fell to N1482.57 per dollar on Tuesday, depreciating by 9.93%.
  • The CBN attributes the fall to lenders under-reporting transactions on the financial market, leading to misinformation and market manipulation.
  • The situation underscores the challenges facing Nigeria's foreign exchange market, with investors eagerly awaiting concrete actions to resolve this issue.

According to FMDQ Exchange data, the Naira fell to N1482.57 per dollar on Tuesday, depreciating by 9.93% compared to the previous day's rate of 9.03%, when it closed at N1,421 to a dollar. The Central Bank of Nigeria (CBN) has attributed the fall to lenders under-reporting transactions on the financial market, leading to misinformation and market manipulation.

In a statement made known to the public, the apex bank stressed that such activity would be sanctioned as the CBN remains committed to resolving outstanding obligations across various sectors.

Mrs. Hakama Sidi Ali, the CBN's Acting Director of Corporate Communications, emphasised that Governor Olayemi Cardoso and his team are dedicated to ensuring that the backlog of payments in all sectors is cleared, restoring confidence in the Nigerian foreign exchange market.

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In her statement, she stated, "The CBN is actively working with stakeholders to improve liquidity in the forex market, alleviating pressure on the Naira. We are optimistic that the market will respond positively to the latest injection of over $64 million. It's essential for all participants in the foreign exchange market to avoid speculative actions that could negatively impact the Naira. We call on the public to support the ongoing reforms in the foreign exchange market, ensuring that market forces continue to determine exchange rates."

One of the recent initiatives by the apex bank was the disbursement of an additional $64.44 million to airlines waiting for their claims to be settled. Unfortunately, even with this injection of funds, this payment covers only 17% of the $800 million debt owed to airlines, Nairametrics reported.

In addition to the earlier payment of $64 million to airlines, the CBN still has about $5 billion in forwards that have matured after it had already paid $2.5 billion to manufacturers and importers.

The situation underscores the challenges facing Nigeria's foreign exchange market, with stakeholders eagerly awaiting concrete actions to resolve this issue and restore confidence in the financial system.

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