Dipo Olowookere
By Dipo Olowookere
The value of the Naira to the United States Dollar weakened to its lowest level in the parallel market segment of the foreign exchange (forex) market on Wednesday.
Data harvested by Business Post showed that the Nigerian Naira was exchanged with the greenback at N1,100/$1 in the midweek session.
In the previous trading day, the domestic currency was quoted in the black market at N1,070/$1, indicating that it lost N30 against the US currency within 24 hours.
The exchange rate of Nigeria’s legal tender went that bad after the Central Bank of Nigeria (CBN) removed the FX restrictions on the importation of cement, rice and 41 other items.
The inability of the country to meet the forex demand of customers has put the Naira under pressure. Also, the huge FX backlog has not helped the situation.
The federal government recently sought the approval of the Federal Executive Council (FEC) for a $1.5 billion loan from the World Bank aimed to boost the value of the local currency.
The Nigerian National Petroleum Company (NNPC) Limited also recently approached the African Export-Import Bank (Afreximbank) for a $3 billion emergency loan to be repaid through crude oil.
The rationale behind this was to use the funds to shore up the nation’s external reserves, which will, in turn, support the value of Naira in the forex market.
