In an alarming development, the Nigerian naira plummeted to an unprecedented low of N950 against the US dollar on the parallel market on Thursday afternoon. This marks a staggering 5.9 percent depreciation compared to the N897 exchange rate observed earlier in the week.

Currency traders, commonly referred to as ‘abokis,’ reported buying rates of N935 and selling rates of N950 for the dollar, creating a profit margin of N15.

In the Agbara region of Ogun state, naira trades have similarly been affected, with buying rates at N920/$ and selling rates at N940 per dollar.

Aliyu, a Bureau De Change (BDC) operator, voiced concerns about the escalating rates, stating, “Dollar is scarce now. The rate keeps going up and I don’t even know why. Despite that, people are still coming to buy the little they can get.”

At the investors and exporters (I&E) window, the naira faced a depreciation of 3.28 percent against the dollar, closing at N782.38/$ on Wednesday, as reported by the FMDQ OTC Securities Exchange, the platform overseeing foreign-exchange trading in Nigeria. During the trading day, the exchange rate reached a peak of N800 to the dollar before settling at N782.38.

Within this context, the total trade value at the I&E window for Wednesday was recorded at $60.26 million.

The currency’s sharp decline follows major reforms introduced by the Central Bank of Nigeria (CBN) in mid-June. These reforms, including the unification of all segments of the foreign exchange market and the re-introduction of the “willing buyer, willing seller” model at the I&E window, aimed to foster a more unified and transparent forex market.

However, since the unification of exchange rate windows, the naira has experienced consistent fluctuations in the official window and substantial depreciation in the black market.

The Economist Intelligence Unit (EIU) predicted last month that the Nigerian government might seek greater control over the exchange rate to stem the naira’s continued devaluation. The EIU’s forecast highlights the mounting concerns over the naira’s vulnerability and the need for effective measures to stabilize the currency.

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