In a reflection of Nigeria’s economic challenges, the local currency, the naira, has breached the 2,000-naira mark against the British pound, signaling further strain on the country’s forex market.
This development comes amidst a consistent surge in demand for foreign exchange, particularly the pound and the dollar.
Malam Ibrahim, a Bureau de Change operator at Wuse Zone 4, confirmed the unsettling rates, stating, “Yes, it is true, we are currently selling above N2,000 for the pounds, and it is still about the heavy and consistent demand for these currencies.”
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This surge in demand has led to a rapid depreciation of the naira, which now stands at its lowest historical point, marking a significant decline from N1,930 just days ago.
The downward spiral isn’t limited to the pound alone. The naira also depreciated against the dollar in the parallel forex market, with the exchange rate reaching N1,673 from N1,670/$ on Friday.
Despite efforts by the Central Bank of Nigeria to bolster forex supply through various policies, including halting international oil companies from immediately remitting 100 percent of their forex proceeds abroad, the market continues to face significant challenges.
Market analysts attribute this persistent decline to a surge in demand for dollars, particularly from businesses seeking to restock goods or acquire raw materials.
This heightened demand has been evident since the beginning of the year, underscoring the urgent need for measures to stabilize the forex market and restore confidence in the economy.
The continued depreciation of the naira against major currencies underscores the pressing need for sustainable solutions to address Nigeria’s forex challenges and foster economic stability.