Naira Sinks to Unprecedented N980/$1 Level as Dollar Demand Skyrockets

The Nigerian naira plunged to a record low of N980 per US dollar on the parallel market on Wednesday as demand for foreign currency continued to outstrip supply amid a persistent scarcity of dollars.

The naira has been under pressure since the Central Bank of Nigeria (CBN) devalued the official exchange rate by 7.6% to N410.25 per dollar in May, following the adoption of the NAFEX (Nigerian Autonomous Foreign Exchange Rate Fixing) rate as the new official rate. The CBN also removed the official exchange rate from its website, signalling a move to a single exchange rate regime.

The devaluation was meant to improve the supply of dollars to the economy and narrow the gap between the official and parallel market rates, but it has failed to achieve its objectives. The parallel market rate has widened from N485 per dollar in May to N980 per dollar on Wednesday, representing a 102% depreciation of the naira.