Naira nosedives to lowest level in 8 weeks at black market

The Nigerian currency, naira, at the black market dropped to its lowest level in nearly eight weeks despite the dollar nosediving at four-month lows as currency traders were positioned for deeper-than-expected interest rate cuts by the Federal Reserve in 2024.

The naira traded at N1260 to the dollar at the parallel forex market where forex is sold unofficially.

Nigeria has faced serious FX shortages since the pre-pandemic period of low oil prices, which prompted foreign investors to exit their local assets and repatriate their profits in dollars.

NairaMetrics reports that the dearth of dollars eventually causes the naira to weaken because there is more demand for the few dollars available, increasing the value of the dollar as the local currency.

Furthermore, the naira is likely going to have greater difficulties in the coming year because of Nigeria’s poor economic performance.

Mr. Yemi Cardoso, the CBN chief, in his most recent statement, highlighted the decrease in revenue from oil exports in the upcoming year.

The OPEC quota for Nigeria, which is set at 1.78 million barrels per day, will likely result in lower oil industry revenue for Nigeria next year, according to Mr. Cardoso.

He made references to production stoppages, crude oil theft, and divesting from major oil companies as the reasons behind the nation’s poor oil output in recent years. Additionally, the CBN Chief expects oil export revenue to decline in the coming year.

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