The naira steadily appreciated versus the dollar prior to its decline. Nigerians are questioning Yemi Cardoso, the governor of the Central Bank of Nigeria, about the ongoing depreciation of the currency due to the naira’s downward trend versus the US dollar.
The official market saw a minor depreciation of the naira on Monday, April 22, 2024, with a trade rate of ₦1,234.49 to the dollar. This marked the beginning of the collapse.
On Wednesday, April 24, the value of the currency at the Nigerian Autonomous Foreign Exchange Market (NAFEM) dropped to ₦1,308.52 per dollar.
The News Agency of Nigeria reported that the naira depreciated by ₦8.37 on Wednesday based on statistics from the FMDQ Exchange, the official trading platform that manages the Nigerian Autonomous Foreign Exchange Market (NAFEM).
After a full day, the naira depreciated even more, reaching ₦1,309 on the official market and ₦1,420 on the black market for every dollar. Kluemedia was informed by a Bureau de Change operator at the Zone Complex in Wuse, Abuja, that the naira is currently worth between ₦1400 and ₦1420 to the dollar.
Despite the CBN’s involvement, the naira fell following a period of steady appreciation vs the US dollar, a development that was applauded by Nigerians for Cardoso’s management of the currency’s ascent amidst the nation’s ongoing economic crisis.
The increasing demand for the dollar in the foreign currency market is claimed to be the cause of the naira’s ongoing downward trend.
In the meantime, the governor of the CBN pledged to do everything within his power to attain a stable currency rate during a news conference held in conjunction with the annual meeting of the World Bank Group and the International Monetary Fund (IMF).
According to the current exchange rate, the naira has dropped 19.64% in just two weeks. As a result, Nigerians are asking the governor of the CBN why the currency hasn’t recovered from its recent increase and why the present decline is still going strong.
Recall that there were rumours that the CBN was using Nigeria’s foreign reserves to defend the naira during its rise vs the dollar. However, in a recent interview, he refuted these reports, stating that the central bank has no plans to do so. “I want to try and make this as clear as possible,” he stated. We do not intend to support the naira. It’s not. I’ve read a lot in the last few days on various viewpoints regarding the state of our reserves. It is counterintuitive if you consider our guiding policies and philosophies from the beginning.”
Cardoso believes that the day may come when the CBN won’t have to intervene until it is absolutely required.