The Nigerian Naira has plummeted to a three-and-a-half low against the US Dollar, to N300 – $1 on the parallel market.
The record slump in value has been attributed to the Nigerian Central Bank’s move to curb the supply of dollars in the country.
Governor of the NCB Godwin Emefiele said foreign reserves stood at around $28 billion compared with $37 billion in June 2014, and that the bureaux de change operators were depleting them at a rate of $28.4 million per week.
“This is a huge hemorrhage on our scarce foreign exchange reserves, and cannot continue,” Emefiele told a news conference in the capital Abuja.
The price of crude oil also recently dropped briefly below the widely watched $30-per-barrel level on Tuesday, extending a selloff that has sliced almost 20% off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint.
Ongoing tension between two of the world’s biggest oil suppliers Iran and Saudi Arabia is also likely to mean that the market will remain volatile, which will inevitably lead to a weakened Naira as crude oil production accounts for 78% of Nigeria’s economy.
Before the elections I was talking to my Mr Okpanachi on the type of this change coming to us, he was always sounding positive about the change. Nowadays if I raise the issue my very good friend always sweep it under the rug
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