New reports just emerging show that the naira has continued its downward decline at both the official and the parallel market.
The legal tender suffered a steep depreciation in 2022 with the national currency losing between at least 11 per cent and 23 per cent.
An analysis of the exchange rates’ movements showed that the naira lost 11 per cent of its value at the official market and was worse at the parallel market, where it lost not less than 23 per cent of its value.
The local currency, which started the year at N416 per dollar in January 2022 at the Investors and Exporters (I & E) Window foreign exchange market, closed the year at N461.50 per dollar, translating to about 11 per cent year on year depreciation.
At the black market, where most independent users source and trade forex, the naira closed at N735 per dollar, compared with its 2022’s opening rate of N565 per dollar.
Most analysts blamed Central Bank of Nigeria (CBN)’s policies for the currency woes as forex scarcity and speculation sustained a year-long volatility, amidst rising inflation.
The CBN had in the last one year taken major steps to stabilize the naira. The apex bank introduced the naira-for-dollar policy allowing foreign currency recipients to earn N5 for every dollar sent.
The CBN had promised that the new policy would provide Nigerians in the Diaspora with cheaper and more convenient ways of sending remittances to the country.
CBN Governor, Godwin Emefiele said the policy implementation would increase the transparency of remittance inflows and reduce rent-seeking activities.
Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, attributed the naira’s continued decline to heightened forex supply shortage, demand pressure and rationing. He said naira rates convergence would require adoption of a full floating exchange rate system determined by the forces of demand and supply.
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