Nigerian Currency Hits Record Low Against US Dollar: Crypto Perspective

• Naira Plunges to an All-Time Low Against the US Dollar
• Naira: An Undervalued Currency
• US Dollar Dominance Over the Nigerian Naira
• Expected Results and the Way Forward

Naira Plunges to an All-Time Low Against the US Dollar

The Nigerian Naira (NGN) has hit a new record low against the US dollar, descending to 893.5 on Tuesday. This continued decline has been observed since January 2023, impacting Nigeria's economy as the currency devalues in the global forex market. The Naira, which stood at 460 against the US dollar in January the previous year, has doubled its losses by reaching 893 this month.

Naira: An Undervalued Currency

According to Nigeria's Central Bank Governor, Olayemi Cardoso, the Naira is currently undervalued against the US dollar. Cardoso affirms that efforts are underway by Central Bank authorities to rectify this situation and revive the struggling Naira. Cardoso declares:

We believe that the naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate.

US Dollar Dominance Over the Nigerian Naira

The US dollar has been dominating the Nigerian Naira for over a year, causing the local currency to plummet. The Naira is currently at new lows in both official and unofficial forex markets. When asked how the Central Bank intends to rescue the Naira, Cardoso revealed plans to streamline and unify multiple exchange rates.

Expected Results and the Way Forward

These efforts are expected to result in a consistent and stable exchange rate for the Naira against the US dollar. This move should enhance transparency, limit arbitrage opportunities, and decrease simultaneous buying and selling of the Naira. Cardoso emphasizes:

Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years.

Check out how other local currencies, such as the Indian Rupee, are performing against the US dollar.

Edited by Jonathan Stoker