The Nigerian Naira (₦) is facing turbulence, plummeting to N910/$ in the black market, sparking fears it might descend further to N1000/$ soon. Despite stabilizing around N750/$ just weeks ago, it’s been in a rapid decline recently.
Trading conditions are notably unpredictable. The Naira is fluctuating between N900/$ and N915/$, with many black market traders running out of stock. Meanwhile, the official Investors’ and Exporters’ (I&E) window reports a steadier rate around N782/$.
The gap between the official and black market rates is widening, now at a concerning 16%. The International Monetary Fund (IMF) warns that such disparities, especially beyond 5%, can lead to detrimental roundtrip transactions.
After the recent foreign exchange reforms, banks like the Bank of America (BOfA) were optimistic about the Naira’s trajectory, predicting a move towards 680 per dollar. However, the Economist Intelligence Unit (EIU) forecasts a gloomier picture, suggesting the Naira might dip to N1,018/$ by 2027.
This currency instability could have economic repercussions, impacting import costs, foreign trade, and investment. The average Nigerian might feel the pinch with diminished purchasing power, and political critiques of monetary policies are likely. The upcoming actions of Nigeria’s Central Bank will be pivotal in this scenario.
