The Nigerian Naira Hits Record Low Against US Dollar, Efforts Underway to Rectify

Nigerian Naira Plunges to New Low

The Nigerian currency reportedly plunged to a new low versus the U.S. dollar on the official market on Jan. 25. Central Bank governor Olayemi Cardoso has said the naira is currently "undervalued" and that efforts are underway to rectify this.

Continued Depreciation of the Naira

The beleaguered Nigerian currency has plunged to a new low against the U.S. dollar on the official market, briefly falling to NGN1,398 per greenback on Jan. 25. According to a Reuters report, the naira's new official record low saw it nearly converge with the parallel market exchange rate, which stood at NGN1,400:USD1.

This latest depreciation of the naira is a continuation of a descent that seemingly began immediately after Bola Tinubu succeeded Muhammadu Buhari as Nigeria's president and removed former Central Bank of Nigeria (CBN) Governor Godwin Emefiele. Before that, the Nigerian central bank had kept the naira's exchange rate versus the dollar fixed at just under NGN500:USD1.

Following the appointment of the new CBN leadership, the naira has steadily depreciated against major currencies on both the official and unofficial markets. Many Nigerian economy experts agree that the ongoing slide of the naira is mainly due to shortages of foreign exchange.

The Naira's True Value

However, the current CBN governor, Olayemi Cardoso, recently told delegates attending the launch of an economic outlook report that the naira is in fact "undervalued" and efforts are now underway to help it realize its true value.

"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," Cardoso reportedly said.

CBN Plans to Ensure Return of Foreign Exchange Inflows

According to a report in the Leadership, the Central Bank of Nigeria (CBN) is planning to take several steps to ensure that all foreign exchange inflows are returned to the central bank.

Stability and Investor Confidence

Meanwhile, Cardoso said he is hoping that some of the reforms being undertaken by the CBN will result in a consistent and stable exchange rate. Such an exchange rate will boost investor confidence and make Nigeria an appealing foreign direct investment destination.

Do you agree with the CBN governor's comments about the naira's value? Let us know what you think in the comments section below.

Frequently Asked Questions

How much gold do you need in your portfolio?

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It's important to understand that precious metals aren't only for wealthy people. It doesn't matter how rich you are to invest in precious metals. You can actually make money without spending a lot on gold or silver investments.

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  • (Basically, if your GDP grows by 2%, you need miners to dig 2% more gold out of the ground every year to keep prices steady.) (
  • You can only purchase gold bars at least 99.5% purity. (
  • Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (
  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (

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The History of Gold as an Asset

From ancient times to the beginning of the 20th century, gold was used as a currency. It was universally accepted and loved for its beauty, durability, purity and divisibility. Because of its intrinsic value, it was also widely traded. There were different measures and weights for gold, as there was no standard to measure it. For example in England, a pound sterling equals 24 carats. In France, a livre tournois equals 25. Carats of golden. Germany had one mark which equals 28. Carats.

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By: Terence Zimwara
Title: The Nigerian Naira Hits Record Low Against US Dollar, Efforts Underway to Rectify
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Published Date: Sun, 28 Jan 2024 06:30:32 +0000

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