On Thursday, December 21st, 2023, the Nigerian naira experienced a marginal dip at the official market, closing at N861.91 per US dollar, marking a 0.85% depreciation compared to the previous day’s closure at N854.61 per dollar. Notably, the intraday high soared to N1249/$1, while the intraday low was N700/$1, indicating a wide margin of N549/$1.
At the official Nigerian Foreign Exchange Market (NAFEM), where forex transactions are formally conducted, forex turnover remained constant at $181.30 million, mirroring the figures from the preceding day. Conversely, the parallel forex market witnessed a slight appreciation of the naira, with the exchange rate inching up by 0.81% to N1228/$1. Peer-to-peer traders quoted rates around N1193.20/$1.
In the face of the naira’s ongoing decline, economic experts have urged the Central Bank of Nigeria (CBN) to consider de-dollarizing the economy by outlawing local transactions in US dollars. Dr. Biodun Adedipe, founder and chief consultant of B. Adedipe Associates Limited (BAA Consult), highlighted several strategies for the naira’s recovery. He proposed that government agencies cease charging local entities in US dollars and advocated for crude oil sales to local refineries to be conducted in the local currency, the Naira, rather than in dollars.
Adedipe emphasized the need for transparent dealings with participating banks at the I&E Window and recommended a transparent, concerted effort to transform the market. He suggested engaging with bank CEOs to garner support for market reforms, acknowledging the challenges posed by unified exchange rates in an economy with structural weaknesses.