The Nigerian naira appreciated against the dollar on Tuesday, 31 October 2023, closing at N815.32/$1 at the official market.
This represents a 21.81% increase from the N993.82/$1 recorded on the previous day.
The intraday high recorded as of the 30th of October was N998.00/$1, while the intraday low was N6475.00/$1, representing a wide spread of N523/$1.
According to data obtained from the official NAFEM window, forex turnover as of the 30th of October was $881.31 million, representing a 66.01% decrease compared to the previous day.
On the black market where forex is sold unofficially, the exchange rate depreciated by 2.54%, quoted at N1180/$1, while peer-to-peer traders quoted around N1165.23/$1.
More insights:
The federal government has said that it is planning to introduce new rules to the forex market aimed at boosting the value of the naira and stifling the activities of illegal currency trading according to a Bloomberg report quoting a senior government official.
The new rule will include expanding the official market to accept all legitimate transactions and ensuring the “illicit” black market does not get supply.
- The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele said, “We think all of that will happen before December, and maybe in a matter of a couple of weeks we will begin to see the results, such that before the end of the calendar year, naira should find its true value, not the one that is being done currently in the parallel market.”
He also explained in an interview that the federal government’s plans include clearing the backlog of foreign exchange demand estimated at almost $7 billion, establishing transparent guidelines in the FX market, and increasing liquidity in the naira forward market.
The situation should not be allowed to continue like this.
The demand for dollar is increasing, largely for the very negative reasons of corruption; while the supply is gravely very poorly zeroing down.
I will like to offer a suggestion that may be a possible solution if I have the contact of Mr Oyedele Taiwo, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.