Tighter Austerity, Job Losses Loom as Naira Sells 194 to Dollar

Nigeria's current woes seem not to be fading just yet following recent developments in the international scene.

The continuous fall in the price of crude oil and the recent devaluation of the nation’s currency, the naira, are putting serious pressure on the economy, with the currency experiencing a free fall in recent times.

The naira exchanged for as high as 194 to the United States dollar at the street market on Friday, having traded for about N188 some days ago.

Pen4truth gathered that the pound and euro sold for between N294 and N296, and N236 to N238, respectively on the streets of Lagos on Friday.

Despite the measures taken by the Central bank to check the continued devaluation of the naira as a result of the free fall in crude oil price, including using a huge chunk of the nation’s external reserves to defend the naira, the situation seems to be getting worse.

The persistent depreciation of the naira, however, forced the CBN to on November 25 devalue the currency against the dollar by eight per cent from N155 to N168.

The central bank thus expected the naira to sell against the dollar for between N160 and N176.

However, the naira has been selling outside the CBN target band at the interbank forex market (where the banks sell to themselves and their customers), a situation that has fuelled speculation among analysts that the bank may be forced to devalue the currency soon again.

As of Friday, the naira closed against the dollar at N184.50 at the interbank market.

It is feared that the continuous financial crises may force government and the corporate sector to adopt stricter austerity measures like tax increase, salary reduction, and evenjob cuts to survive the coming days.