The Nigerian naira continued its downward spiral on Monday, falling to a record low of 1,515 against the US dollar on the parallel market. This marks a 2.97% decline from the previous week’s rate of 1,470.

Despite a marginal increase in external reserves, the naira’s value has continued to plummet due to a shortage of dollars in the market. Analysts predict further depreciation unless the Central Bank of Nigeria intervenes.

Last week, the foreign exchange market experienced significant weakness, with the naira falling by 0.45% on Friday alone. The intraday high and low rates also indicated a weakening trend, with the naira reaching a one-month low of 1,470 against the dollar.

The International Monetary Fund (IMF) has advised the Central Bank of Nigeria to implement a well-designed foreign exchange intervention framework to stabilize the currency. The IMF noted that gross international reserves declined in 2023 due to persistent capital outflow pressures, leading to a sharp depreciation of the naira after the unification of official foreign exchange windows in June 2023.

However, the IMF also acknowledged that the naira has started to stabilize following monetary policy tightening and the resumption of foreign exchange interventions in February and March 2024.