The naira depreciation caused the currency to fall further to N1,520.123 to a dollar, data from trading platform Naira Rates revealed Wednesday.
This is against the currency’s depreciation to N1,482.75 per dollar recorded in the official foreign exchange market on Tuesday, amounting to a N38 depreciation for the naira under 24 hours.
Tuesday’s fall made it the first time after the COVID-19 period that the official exchange rate will be higher than the parallel market exchange rate, which traded at N1,470 per dollar from N1,425 on Monday.
The monetary policy of President Bola Tinubu’s government played a huge role in the further downward slide of the naira after he floated the currency.
Mr Tinubu’s economic policy scrapping fuel subsidy and collapsing multiple foreign exchange windows into the single Importer and Exporter, or I&E window, drastically depreciated the naira’s value by 98 per cent, a report by the Price Water Coopers stated.
The top global business advisory audit firm said in its report ‘Nigeria’s Economic Outlook: Seven Trends That Will Shape Nigerian Economy in 2024’ released last Wednesday that Mr Tinubu implemented policies that had the domino effect of devaluing the naira by nearly 100 per cent but appealed to foreign investors as the move was projected to improve the economy in 2024.
On September 26, the naira witnessed an unprecedented historical low, dipping to N1000 against the U.S. dollar. Since then, the currency lost 17 per cent of its value.
The persistent decline of the naira is a source of concern and a spotlight on the challenges associated with President Bola Tinubu’s fiscal policies.
Despite the far-reaching consequences, including inflation and diminished economic purchasing power, Mr Tinubu has undertaken what his cabinet refers to as strategic moves, such as the petrol subsidy removal, which was met with resistance and scepticism but reflects an attempt to reduce the government’s financial burden and promote a more market-driven economy as well as the decision to adopt a clean float foreign exchange management.