The Nigerian Naira has slumped to a record low against the US Dollar on the parallel market.
The exchange rate is now at N305 to USD1, the lowest rate in forty-three years.
Only last Tuesday, the Naira was trading at N282 to the dollar before the Nigerian Central Bank announced that it would stop sales to non-bank foreign exchange operators, especially bureaux de change operators.
The new year stock market haemorrhage also entered its eighth day yesterday, with a total N1.22 trillion losses affecting investors, giving a year-to-date decline of 12.36% in market capitalisation.
The stock exchange closed at N8.63 trillion while the NSE ASI, which opened the year at 28,642.25 points, closed yesterday at 25,103.05 points.
The price of crude oil also recently dropped below $30-per-barrel level on Tuesday, extending a selloff that has sliced almost 20% off prices this year amid deepening concerns about fragile Chinese demand and the absence of output restraint.
Ongoing tension between two of the world’s biggest oil suppliers Iran and Saudi Arabia is also likely to mean that the market will remain volatile, which will inevitably lead to a weakened Naira as crude oil production accounts for 78% of the Nigerian economy.
The Naira remains fixed at N197 to the dollar at the official interbank window.
If you want to keep track of the issues and events that will effect the economy and the strength of the Naira, you can read our bi-weekly updates on the price of oil and the Naira – US Dollar exchange rate on the parallel market.
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