Bank notes in naira, dollars, euros and pounds sterling are pictured in Lagos, on January 26, 2016. (Photo by PIUS UTOMI EKPEI / AFP) (Photo by PIUS UTOMI EKPEI/AFP via Getty Images)

Nigerian naira hits a record low of N1,100 per dollar on the black market

The Nigerian naira has experienced a significant devaluation, hitting a historic low of 1,100 naira per US dollar on the black market, as per reports from the online platform abokiFX, released on Wednesday.

This devaluation closely follows the official market, which also recently set a new record low at 980 naira per dollar due to persistent dollar shortages.

The unofficial market’s continued freefall of the naira can be attributed to the removal of currency restrictions on the official market. These restrictions had previously supported the naira’s value.

In response to this economic challenge, the central bank has outlined plans to periodically intervene in the foreign exchange market to enhance liquidity. This move comes in the wake of the lifting of an eight-year ban on certain items accessing dollars through the official market.

Notably, last month, the naira had already breached the 1,000 naira per dollar threshold on the black market. This ongoing devaluation is primarily driven by the overflow of excess dollar demand from the official market into the informal market, contributing to the naira’s continued decline.

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