At the close of trading on Wednesday, January 13, the Nigerian foreign exchange and stock market had sunk to a new low.
The Nigerian currency- the Naira- crashed to it‘s lowest figure in 43 years at N305 per dollar.
Although the Naira was trading at N287 per dollar on Tuesday, the parallel market exchange rate has now risen to an average of N305 per dollar across the country.
The Naira has witnessed a steady depreciation against the dollar since Monday, January 11, when the Central Bank of Nigeria (CBN) stopped weekly dollar sales to Bureaux De Change (BDCs).
CBN Governor, Godwin Emefiele, had said: “This fall in oil prices also implies that the CBN‘s monthly foreign exchange earnings has fallen from as high as US$3.2 billion to current levels of as low as US$1 billion.
“Yet, the demand for foreign exchange by mostly domestic importers has risen significantly. For example, the last we had oil prices at about US$50 per barrel for an extended period of time was in 2005. “At that time, our average import bill was N148.3 billion per month.
“In stark contrast, our average import bill for the first nine months of 2015 is N917.6 billion per month, even though oil prices are now less than US$35 per barrel. The net effect of these combined forces unfortunately is the depletion of our foreign exchange reserves.”
“As of June 2014, the stock of Foreign Exchange Reserves stood at about US$37.3 billion but has declined to around US$28.0 billion as of today. With the current economic realities in the country, the NSE, with the aim of hitting N200 trillion market cap by 2019, may well be moving away from its target.”
Meanwhile, the Nigerian stock exchange has also continued its continuous negative streak, with a total N1.22 trillion losses recorded by investors, since the turn of the year.
The stock exchange, which opened this year at market capitalisation of N9.851 trillion began a free fall till yesterday, closing at N8.63 trillion while the NSE ASI which opened the year at 28,642.25 points closed yesterday at 25,103.05 points.