Naira Declines Against US Dollar, Euro at the Black Market
The Naira depreciated slightly against key global counterparts on Tuesday across the nation’s black markets as scarcity and economic uncertainty deepens.
The local currency exchanged at N463 against the United States Dollar, representing a N1 decline from N462 it exchanged on Thursday.
Against the European common currency, the Naira dipped by N3 from N540 it traded on Monday to N543 on Tuesday.
However, against the British Pound, the Naira gained N1 to N595 from N596 it exchanged last week Thursday.
Nigerian Naira remained under pressure due to the dwindling foreign reserves and weak foreign revenue battered by a plunge in demand for crude oil and low oil production.
The series of policies introduced by the Central Bank of Nigeria to prop up the Naira value against global counterparts remains ineffective as importers and businesses that depend on foreign goods for operations continue to struggle with persistent scarcity.
Nigeria, a crude oil-dependent economy, backed its local currency with the revenue generated from the sales of crude oil. Meaning, the value of the Nigerian Naira is directly proportional to sales of crude oil. However, the record plunge in crude oil demands and prices due to COVID-19 that impacted the global economy weighed on the local currency and continue to do so.
Also, the uncertainty surrounding the government policies amid the projected third-quarter economic recession is affecting Nigeria’s foreign direct investment necessary to augment weak foreign reserves and cushion the economy given its overdependent on import products.
Source: Naija News