Emmanuel OchayiThe exchange rate between the Naira and the dollar plummeted to a record low of N848/$1 on the official investor and exporter window, as revealed by data from the FMDQ website.
This devaluation was accompanied by an intra-day high of N981/$1, indicating a significant shift in the pricing of the dollar at the official market.
The official exchange rate on October 17th closed at N848.12/$1, in contrast to the N778.80/$1 recorded just a day earlier, emphasizing the devaluation of the naira. This alarming decline has now brought the official exchange rate disparity to 18.8%, well beyond the acceptable range of around 5%.
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The exchange rate crisis has plagued Nigeria for the past two years, and this latest development has raised concerns among traders and experts. The official window, designed to align with supply and demand dynamics, is facing scrutiny as the disparity between official and parallel market rates deepens.
Diaspora remittances have been affected by the perception that the official rate is artificially low, discouraging remittances through official channels. The recent depreciation raises questions about the effectiveness of the central bank’s managed float exchange rate system, adopted earlier this year.
The situation may take a critical turn in the coming days, and experts are closely monitoring the exchange rate to assess the potential economic repercussions. This downturn follows the recent lifting of the ban on 43 items and underscores the need for a comprehensive solution to stabilize Nigeria’s currency exchange market.
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