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UPDATE: Again, Naira Falls to N1,825 Against US Dollar

Notwithstanding efforts by the Economic and Financial Crimes Commission (EFCC) to curtail the operations of suspected manipulators and speculators, the naira maintained its downward spiral on Tuesday, reaching N1,825 to the dollar.

A day earlier, it was claimed that the EFCC had engaged in the well-known Abuja Zone 4 market, specifically targeting Bureau De Change operators in an attempt to slow down the naira’s sharp slide.

But the depreciation of the naira continued less than a day after the EFCC took action, falling from N1,700 to N1,825 in the same time frame.

Central Bank of Nigeria Vows to Tackle Currency Hoarders and Speculators

Notwithstanding efforts by the Central Bank of Nigeria to stabilise the value of the currency, this loss represents an all-time low for the naira against the US dollar and the British pound sterling in Nigerian history.

The naira’s declining trend began before Bola Tinubu took office in May of last year, but it has accelerated since then, especially after the decision to float the currency.

The naira fell sharply in September, peaking at N1,000 to the US dollar on the black market. This significant devaluation highlighted the difficulties in controlling the national currency in the face of rapidly rising inflation.

The devaluation of the naira has been attributed to criticism of the government’s economic policies, which include the elimination of the gasoline subsidy and the combination of foreign exchange windows into a single Importer and Exporter (I&E) window. A Price Water Coopers analysis claims that these actions caused the naira’s value to plummet by 98%.

Investors Gain N10bn As Market Rebounds

Notwithstanding these obstacles, Tinubu’s administration has stood by its policies, which include cutting the petrol subsidy, as essential measures to promote a more market-driven economy and lessen the fiscal load on the government.

The continued depreciation of the naira, however, underscores the difficulties and ramifications of the government’s budgetary policies under Tinubu’s direction and is still a reason for concern.

 

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