The Nigerian naira has continued its downward slide against the United States dollar, with the exchange rate hitting N1,637.59 at the close of trading on Tuesday. This marks a depreciation of N14.63 from Monday’s rate of N1,622.96, representing a 0.90% drop in the naira’s value.
Data from the Nigerian Autonomous Foreign Exchange Market shows that the decline in the naira is making it increasingly expensive for Nigerians to purchase foreign goods and services. The FMDQ report also highlighted a significant turnover of $143.15 million in the foreign exchange market, indicating heightened trading activity despite the currency’s weakening performance.
While the spot rate closed at N1,637.59, reflecting a slight recovery of N3.61 from the opening rate, forward trading showed significant volatility, with rates ranging from a high of N1,655.00 to a low of N1,499.00, underscoring instability in the market.
The naira has been under pressure in recent months, though Friday’s trading session saw a brief uptrend, with the currency appreciating by 2.9% to close at N1,593.32. This recovery was driven by an increased supply of dollars, totaling $245.17 million.
However, this latest dip comes as global oil prices drop below $70 per barrel, further complicating Nigeria’s economic situation. As a nation heavily reliant on oil, which accounts for over 80% of government revenue and 90% of export earnings, the crash in oil prices has intensified pressure on the naira.
Former Chief Economist of Zenith Bank, Marcel Okeke, warned of the implications for Nigeria’s oil sector. “The reduction in revenue, coupled with the government’s increased borrowing through dollar-based bonds, spells disaster for the economy,” he told The PUNCH.
With pipeline vandalism and youth unrest also affecting oil production, the naira’s continued decline signals deepening economic challenges for Nigeria.
