As the Nigerian naira tumbled to an all-time low of ₦1200 against the US dollar in the parallel market, Yemi Cardoso, the Governor of the Central Bank of Nigeria, has remained tight-lipped, fueling concerns about the country’s economic stability.
For weeks, the naira has experienced a relentless downward spiral, sparking alarm among both citizens and investors. On Thursday, it breached a significant milestone, trading at ₦1,200 to $1 in the parallel market, a record low that raised questions about the Central Bank’s ability to maintain the currency’s stability.
Nigeria’s parallel market, also known as the black market, has seen a surge in activity in recent months due to increasing demand for foreign exchange and a growing disparity between the official and parallel market rates. Many Nigerians have turned to the parallel market to obtain US dollars, as the official exchange rate hovers around ₦760 to $1.
Economic analysts have attributed the naira’s depreciation to several factors, including:
- Falling Oil Production: Nigeria heavily depends on oil revenue, and the decline in oil production has negatively impacted the country’s foreign exchange reserves.
- Inflation: Double-digit inflation rates have eroded the purchasing power of the naira, increasing the demand for foreign currency to hedge against inflation.
- Rising Debt: Nigeria’s debt burden has been on the rise, causing concerns about the country’s fiscal stability.
- Lack of Confidence: Investors and foreign exchange traders have become increasingly wary of Nigeria’s economic policies, leading to capital flight.
Despite these factors, Yemi Cardoso’s silence on the matter has left many Nigerians anxious. Calls for the Central Bank to take decisive action to stabilize the naira have grown louder in recent days. Critics argue that the Central Bank’s intervention in the foreign exchange market is necessary to bridge the gap between the official and parallel market rates.
Cardoso’s silence has fueled speculation about the government’s intentions. Some believe that the Central Bank may opt for a managed devaluation of the naira to attract foreign investment and alleviate some of the pressure on the currency.
Meanwhile, businesses, importers, and everyday Nigerians who rely on foreign exchange are grappling with the impact of the naira’s depreciation. Many have been forced to raise prices on imported goods, which has led to further inflationary pressures and an additional burden on consumers.
Nigeria, Africa’s largest economy, is facing an economic crisis that requires swift and effective action. The fate of the naira, and by extension the country’s economic stability, now rests on the shoulders of Governor Yemi Cardoso and the Central Bank of Nigeria. As the naira continues its downward trajectory, Nigerians remain anxious for answers and action from the nation’s financial leadership.