The Nigerian Naira has once again experienced a significant depreciation against the US Dollar, with the currency exchanging for N1,745 per $1 at the parallel market today. This marks another alarming low for the Naira, following a sustained period of instability that has seen the currency struggle to maintain its value.
The recent depreciation comes amid rising concerns about Nigeria's foreign exchange reserves, inflationary pressures, and the widening gap between the official and parallel market exchange rates. This sharp drop in the value of the Naira has raised alarms among businesses and consumers alike, particularly with the continued scarcity of the Dollar in official markets, making the parallel market a critical source for foreign currency exchange.
Economists suggest that the continued depreciation of the Naira is reflective of the country's ongoing economic challenges, including low oil prices, decreased foreign investment, and a growing demand for foreign currency, especially for imports and external debt servicing. The widening exchange rate disparity between the official market and parallel market is putting further strain on the purchasing power of ordinary Nigerians.
Experts urge the Central Bank of Nigeria (CBN) to implement measures to stabilize the Naira, such as increasing dollar inflows, supporting local production to reduce import dependency, and providing more clarity around exchange rate policies. Additionally, there is a call for greater transparency and efficiency in the management of the country's foreign exchange reserves.