Emmanuel OchayiThe Nigerian Naira hit an unprecedented low, closing at N1,099.05 per dollar on Friday, December 8th, 2023, in the official market.
This marked a staggering depreciation from its previous rate, setting a new and concerning trend just weeks before the Christmas holidays.
“This drastic decline in the Naira’s value signifies a critical juncture for the currency,” stated financial analyst Dr Biodun Adedipe, stressing the urgent need for reforms.
“We need to de-dollarize local transactions and explore alternatives, like selling crude oil to local refineries in Naira instead of dollars, to strengthen the economy.”
The Central Bank of Nigeria (CBN) extended the timeline for issuing letters of credit and managing Form M and NXP registrations, attributing the adjustments to the ongoing foreign exchange scarcity and striving to align with service delivery regulations.
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Despite efforts by the CBN to stabilize the foreign exchange market, the Naira’s downward spiral persists, prompting fears about its impact on the upcoming festive season.
“The implications of this currency devaluation on businesses are profound,” added Adedipe. “It may lead to increased production costs and challenge profitability, affecting both small and large enterprises.”
The depreciation also disrupted international trade, causing foreign suppliers to reject letters of credit from Nigerian businesses, further compounding economic woes. “This crisis has necessitated a reconsideration of strategies to prevent further decline,” remarked Adedipe.
The Governor of the CBN, Yemi Cardoso, emphasized that the revised service charter aimed to enhance customer service delivery, aligning with the Business Facilitation Act 2022. However, the continued decline of the Naira suggests a more approach is imperative to curb the currency’s free fall.
With just weeks left until the festive season, concerns loom over its impact on household budgets, inflation rates, and consumer spending habits.
As the country grapples with these challenges, urgent and decisive measures are crucial to stabilize the Naira and safeguard the economy’s stability.
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