Findings have shown that in the past three months, the naira has depreciated by 38.9 percent against the United States dollar at the official I&E window of the Central Bank of Nigeria.
Data obtained from the FMDQ Securities Exchange revealed that the local currency fell from N745.19/$ on October 3, 2023, to N1035.12/$ as of January 3, 2024.
While the naira depreciated from 471/dollar to about 700/dollar at the official market shortly after the announcement of the exchange rate unification policy of the CBN in June 2023, findings showed the local currency had fallen further in the past few months to over N1000/dollar.
At the parallel market, the local currency has been trading around 1,220/dollar in recent weeks.
On Sunday, manufacturers and other members of the organised private sector said the falling naira value at the official and parallel markets was having a severe negative impact on their bottom lines.
Specifically, the Manufacturers Association of Nigeria, Lagos Chamber of Commerce and Industry, as well as the Nigerian Association of Small-Scale Industrialists, said their members were already scaling down operations over the development, a situation that might lead to the sacking of more workers.
The naira volatility on the I&E window has continued despite recent efforts by the Federal Government to improve the liquidity of the FX market.
Commenting on the issue of volatility, the CBN Governor, Olayemi Cardoso, recently stated that the bank was concerned about this and doing all within its power to address it.
He said, “We are taking a comprehensive look at all the different policies that have come out from the central bank over a period of time and come out with an elegant document that states what is required from start to scratch and is clear on how to play that market.”
However, members of the OPS including MAN, and LCCI have expressed worry that more companies may wind down operations in Nigeria if the trend of foreign exchange scarcity continues in the country.
