The naira experienced an unprecedented drop, reaching a historic low of N1,099.05/$ at the official Investor and Exporter forex window on Friday, marking the culmination of a turbulent period for the national currency.
This represents a substantial 30.36% decline from its previous closing rate of N843.07/$, as indicated by data from the FMDQ Securities Exchange. This latest figure stands as the lowest closing rate for the naira since the Central Bank of Nigeria designated the I&E window as the official trading platform.
Throughout the day, the national currency commenced trading at N844.10/$ and concluded at N1,099.05/$. Over the past few months, the naira has undergone a significant devaluation, surpassing 40%, thereby contributing to inflationary pressures in the country.
In June, the CBN declared, “The Central Bank of Nigeria wishes to inform all authorised dealers and the general public of the following immediate changes to operations in the Nigerian Foreign Exchange Market: Abolishment of segmentation. All segments are now collapsed into the Investors and Exporters window. Applications for medicals, school fees, BTA/PTA, and SMEs would continue to be processed through deposit money banks.
“Re-introduction of the ‘Willing Buyer, Willing Seller’ model at the I&E Window. Operations in this window shall be guided by the extant circular on the establishment of the window, dated 21 April 2017 and referenced FMD/DlR/ClR/GEN/08/007. All eligible transactions are permitted to access foreign exchange at this window.”
Since then, the naira has weakened steadily to solidify its place as one of the worst-performing currencies in Africa.
The World Bank recently stated, “So far this year, the Nigerian naira and the Angolan kwanza are among the worst performing currencies in the region: these currencies have posted a year-to-date depreciation of nearly 40 per cent.”