Since 1990, the Nigerian naira has experienced significant fluctuations against the US dollar. In the early 1990s, the naira was devalued multiple times due to economic challenges, political instability, and external pressures. In 1991, the naira was devalued by 35% against the dollar, and in 1993, it was further devalued by 33%.In 1994, the naira was pegged to the US dollar at a fixed exchange rate of 22 naira to 1 dollar as part of an economic stabilization program. However, this fixed exchange rate regime led to a thriving black market for foreign exchange and a widening gap between the official and parallel market rates.In 1999, the naira was officially devalued, and a new foreign exchange regime was introduced. The Central Bank of Nigeria (CBN) adopted a managed float exchange rate system, allowing the naira to fluctuate within a certain band. However, the naira continued to depreciate against the dollar over the years.Between 2004 and 2016, the CBN implemented various policies to stabilize the naira, including the introduction of multiple exchange rates, restrictions on access to foreign exchange, and interventions in the foreign exchange market. Despite these efforts, the naira experienced significant depreciation, reaching an all-time low of around N500 to 1 dollar in 2017.On Tuesday, 25th July 2023, the naira appreciated against the dollar, reaching N791.42 at the Investors and Exporters window. The highest rate recorded was N845, while the lowest was N730. A total of $51.55 million was traded at the investors and exporters window.In recent years, the naira has continued to fluctuate due to various factors such as oil price volatility, foreign exchange reserves, inflation, and economic policies. Efforts to diversify the economy and attract foreign investments have been made to stabilize the naira and reduce its vulnerability to external shocks.
Source: People’s Gazette
