Naira depreciation’ll worsen Nigeria’s food crisis — W’Bank

• Naira depreciation worsens Nigeria’s food crisis 
• Naira hit rock bottom, N815 per dollar at the black market

According to the World Bank’s most recent Commodity Markets Outlook report, the declining value of the Nigerian naira and the currencies of the majority of developing economies is increasing the cost of food and gasoline, potentially worsening the food and energy crises that many of them already suffer.

The report showed that, in US dollar terms, most commodity prices had fallen since their recent peaks on worries about a coming global recession.

The price of Brent crude oil in US dollars declined by almost 6% between the Russian invasion of Ukraine in February 2022 and the end of last month, it was also stated. However, due to currency depreciations, domestic oil prices rose in over 60% of the oil-importing emerging market and developing nations during this time.

The Washington-based bank estimates that in roughly 90% of these economies, the spike in wheat prices in local currencies was greater than the rise in U.S. dollars.

It claimed that rising energy commodity costs, which were used as inputs in agricultural production, were responsible for raising food prices.

Studies from the World Bank Group revealed that South Asia experienced an average increase in food prices of more than 20% during the first three quarters of 2022. Other regions, such as Latin America and the Caribbean, the Middle East and North Africa, Sub-Saharan Africa, Eastern Europe, and Central Asia, experienced an average increase in food prices of 12 to 15%.

Naira hit rock bottom, N815 per dollar at the black market

The naira has kept falling in value on the black market, falling to N815 to the dollar in Abuja on Monday. Under the presidency of President Muhammadu Buhari, the naira has plunged to yet another record low, trading at N815 to the dollar on the black market exchange Aboki Forex.

Operators of Bureaux De Change (BDC) in Abuja’s Wuse neighborhood who spoke with newsmen claimed that increased demand from Nigerians was causing the naira to depreciate quickly against the dollar.

You will recall that the Central Bank of Nigeria (CBN) recently revealed that it has redesigned some naira notes and will begin circulating them by December 2022. This development comes shortly after that announcement.

The decision was made, according to the apex bank, to lessen the amount of extra cash in circulation and stop counterfeiting.

At the street market, currency dealers in Lagos’ Victoria Island neighborhood quoted the naira at N805 to the dollar. The amount is down N63, or 8.5 percent, from the N742 it was trading for two weeks ago.

Keep Reading: Naira hit rock bottom, N815 per dollar at the black market

Source: punchng.com