There now appears a resignation that the Naira’s downward spiral will continue for a while. Yesterday, it traded for N1,300 to the US $ on the streets, after just crossing the N1,000 mark about three months ago. Two weeks ago, it traded N1,200 to the US $. It trades at a weaker rate of N1,315 on the Binance crypto platform. On the Nigeria Foreign Exchange Market (NFEM), as seen on FMDQ, the Naira closed trading at N878.57 to the US $, but supply to NFEM has decreased by 89% in the last week (No surprise here). There is now a palpable concern that we are back to the 1980s and 1990s when US $, rather than be a means of exchange for international trade and commerce, is now just Nigerian’s preferred store of value but an “asset” class. Compared to real estate, equity, bonds, the holding of US $ in Nigeria has “outperformed” all. The consequences are even more palpable as production and productive activities largely dissipates, driving up inflation and worsening exchange rate crisis.
