NAIRA NEARS N1,500 AGAINST DOLLAR AMIDST SEVERE SCARCITY

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Nigeria’s currency is edging closer to a historic low of N1,500 against the US dollar due to a significant shortage of dollars in the parallel market. Traders witnessed the exchange rate drop to a new low of N1,460 per dollar on Tuesday morning, with expectations of further depreciation in the coming days as the scarcity of dollars worsens.

The naira also experienced a record low of N1,348.63 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, marking a substantial decline of 33.87 percent compared to the N891.90 quoted just the previous Friday. Data from the FMDQ revealed that the exchange rate had reached an intraday high of N1,414.94 per dollar on that same day, alongside a notable decrease in the daily FX market turnover.

Investigations into the matter uncovered a surge in demand for dollars driven by legitimate needs, which has created a challenging environment for importers and travelers relying heavily on the black market. Importers are particularly struggling to secure the necessary funds from both the official FX market and the black market.

Various legitimate needs fueling the demand for dollars include applications for Business Travel Allowance (BTA), Personal Travel Allowance (PTA), school fees, and medical expenses. Small and Medium Enterprises (SMEs) are also feeling the brunt of the scarcity, as indicated by the increased utilisation of Form Q.

 

 

 

 

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