FG’s economic plans in ruins as naira breaks record against dollar in the parallel market

Before June 14, 2023, the Nigerian currency traded for N461 per dollar officially and above N700 on the streets.

After the Central Bank of Nigeria collapsed the multiple exchange rate windows in compliance with the economic policy and direction of President Bola Tinubu, the naira plummeted below N600 per dollar in the official window and above N800 per dollar in the black market.

The naira continues to depreciate

The local currency has continued to spiral out of control as the government grapples with high inflation, which hit 25.80% in August from 22.79% in July.

On Thursday, September 21, 2023, the naira plummeted to a record low, crossing the N1000 per dollar threshold in the parallel market for the first time in Nigeria’s history.

As pressure mounted on the dollar, the local currency was quoted at almost 30% below where it officially closed on Wednesday, September 20, 2023, at the FMDQ.

The rush for Forex is at its frantic peak, with importers and international students putting pressure on the already scarce dollar for imports and school fees.

Bloomberg reports that the naira crash has drained much of the hope gained by the economic reform agenda of Tinubu soon after he took office.

The new President promised to unify the exchange rates and end subsidies on petrol, sending inflation soaring through the roof.

Analysts have blamed the naira crash on CBN’s failure to supply the dollar to the official market, a BusinessDay report said.

They reveal that the apex bank has been on the fence since the beginning of September as rumour filtered in of a possible change of guards amid a probe of senior officials by security agencies.

One of the most challenging jobs awaiting the new CBN governor, Olayemi Cardoso, is the naira's stability. It remains to be seen if he is up to the task.