According to different sources, the Nigerian Naira has been greatly devalued concerning the Dollar and it seems not to show any positive sign of appreciation. There are different rates from different places and a whole lot of speculation as regards the exchange rate. The Naira is becoming a weak currency by the day and there seems to be little or no changes. This article would help you also understand the effect on the country and its inhabitants.
The Central Bank of Nigeria (CBN) has been selling at the rate of 444 Naira per Dollar for more than three weeks to investors meanwhile the official exchange rate is about 409.89 Naira per Dollar according to Google. With information about the black market exchange rate, there have been times that the selling rate is at 570 Naira per Dollar and the buying rate at 565 Naira per dollar.
Recently there has been news that the NAFEX rate that is mostly used by exporters and investors has been weakening about 0.3% on a monthly level, 5.8% on a yearly level, and reportedly was traded as 410.7 per USD. The devaluation of the exchange rate was suspected to be a move that would unify multiple rates that have been ongoing underneath in the country.
Recall that the Central Bank devalued Naira about two times in 2020 and it was traded between 380-381 Naira per Dollar around July, last year. This single act caused the oil prices to tumble as foreign investors pulled out because of the global pandemic of COVID-19 as a safety measure for them. According to financial experts and resources, the prospects for the Nigeria Naira to continue losing value during high inflation and great capital outflows were highly expected.
According to a more recent report, economic panelists say that the NAFEX exchange rate for ending the year 2021 at 428 per dollar and the official bank rate for 2021 at 413 per Dollar is expected according to statistical data and trend with the hope that things don't grow worse.
The official Naira to Dollar rate as of today Wednesday, December 1, 2021, is 409.89 Naira per USD. This seems to be a positive change because according to the data from the FMDQ Security Exchange which is in charge of forex trading stated that the exchange rate was 413.75 Naira to a Dollar on Monday 29 November seems to be better today. Should Nigerians expect more positive changes?
In the Black Market (Lagos Parallel Market) which is not recognized by the Central Bank Of Nigeria (CBN) the exchange rate was still last reported to be at around 550-555 Naira per Dollar. The CBN has further advised that every individual who wants to engage in Forex to go through their banks as they kick against all recognition from the black market.
Judging from the data from FMDQ, the turnover for Forex was at $215.47 million and the Governor of the Central Bank of Nigeria accredited this to the efforts made on the adoption of the eNaira app by good Nigerians. He reportedly stated at the Annual Banker's Dinner that the application has recorded over 600,000 downloads since its launch on October 25. He also encouraged that the financial industry would be needed to partner with the CBN to ensure the success of the app.
To give a high level of qualitative information the Dollar to Naira exchange rate last reported have been 411.64 Naira per dollar in CBN, 470 Naira per dollar in Access Bank, 410.55 Naira per dollar in the Forex market, 378.52 Naira per dollar in Money Gram, and 380.28 Naira per Dollar in Western Union. An increase was recorded in Forex Market at about 0.25% and a 1.99% in Moneygram.
Most Nigerians have been concerned about the effects of these rates on the betterment of daily living for everyone in the country. Here's what to expect in the coming year as entrepreneurs and individuals.
The prices of goods and services would still surge if there's no change or improvement in the investment in the petroleum industry. The Naira depreciation has sent countless businesses of running effectively from 2020 till date and makes it difficult for them to even get buyers as a result of the rising inflation. The whole issue doesn't only affect the entrepreneurs and business owners but also sectors that are dependent on the Dollar to Naira rates for successful running.
The great contribution of the COVID-19 pandemic to the further economic crisis in the world could be regarded as a factor in Nigeria's economy as well. The recession from last year was very strong in the fourth quarter of the year and as a result of the lockdown to contain the effect of the virus, a lot of people lost their jobs in various sectors and the country which has been running majorly dependent on the oil exports revenue crumbled to a great extent.
As reported, crude oil productions in the first quarter of 2021 which were 2.07 mbpd reduced to 1.61 mbpd in the second quarter, and then when the pandemic hit it went lower to around 1.27-1.38 mbpd as a result of the shutdown globally.
Nigeria is currently struggling to get back on its feet but the process is looking tiresome has there have still reports about borrowing from other countries and the world bank which in turn is causing more debts as a country.
In no little way have we all been affected by the Dollar to a Naira rate increase in our daily life and some people are getting richer also by the opportunity and ability to convert the problem into one that can bring in passive income as time go on. According to experts, we should expect more decline in the exchange rate and be prepared for the coming year as there has been no proof of improvement that is certainly enough to guarantee an incline in the economy.
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