Naira Inflation rate increases: Exchange rate rises to N585 at the black Market

By: Damian Okonkwo

The Nigerian exchange rate has be so much stressed at the black Market all through the month of April despite the efforts by the CBN to contain Inflation. Naira seem to have witnessed the strongest inflation so far in the first quarter this month of April. This has been caused by the shaky economy burdened by international debits and dependency on importations.

Many businesses today are crumbling in Nigeria with the dollar exchange rate at the black Market also known as the ABOKIFX skyrocketing to as high as N585 last week's Friday. The black market dealers claimed they bought dollar at N582 and now dsold for N585 on Friday evening, April 22, 2022. A repetition of incidence that occurred earlier last week during Easter seem to be gradually setting in again when dollar was sold for N600 on Easter Sunday evening.

What are the major reasons why the Naira exchange rate is increasing daily？

« The Central Bank Policy: The Naira exchange rate has increased drastically last year following the CBN new policy last year on July 27, 2021, that cut off the popular Bureau de Change from supplying dollar to traders. The CBN rather charge the Nigerian banks to provide dollars for commercial traders and travelers. Since then an artificial scarcity of dollars has been created in the exchange market as banks have not been able to supply enough dollars to Nigerians. The naira had lost value at a whooping N95 to the dollar in less than a year from N490/$1 to N585/$1 on April 22, 2022.

« High Unemployment rate: Nigeria despite being blessed with rich natural resources and able-bodied men and women, still tops the list as the country with the highest unemployment rate. The rate of poverty has so much increased today scaring investors away from the Nigerian Market.

« International Debts: It is very sad that Nigeria as a country still depends on the other Western countries including China for loans to offset her annual budgets. This has been the chief cause of Inflation on the naira as Nigeria ranks the most indebted country across the world with debts unrepaid running in billions of dollars