The forex turnover witnessed a notable increase of 202.97%, reaching $271.50 million, as the Nigerian naira made gains against the dollar in the official market on Tuesday, February 13th, 2024.
This appreciation follows a concerning dip in the naira’s value, which saw it plummet to an all-time low of N1,534.39 per dollar just the day before. The drastic decline was accompanied by a staggering 64.69% drop in forex turnover, plummeting to $89.61 million.
In contrast, the exchange rate worsened in the black market, sliding to N1517/$1, marking a 1.78% decrease from the previous day’s rate.
Despite various policies implemented by the Central Bank of Nigeria (CBN) aimed at bolstering forex supply, the challenges persist.
However, there was a silver lining as the domestic currency managed to appreciate by 2.36%, closing at N1499.07 to a dollar by the end of the business day.
These figures are sourced from the Nigerian Autonomous Foreign Exchange Market (NAFEM), where forex transactions are officially conducted.
- This represents an N35.32 loss or a 2.36% decrease in the local currency compared to the N1534.39 it closed at on the previous day.
- The intraday high recorded was N1550/$1, while the intraday low was N1,000/$1, representing a wide spread of N550/$1, the same as what was recorded the previous day.
- According to data obtained from the official NAFEM window, forex turnover at the close of trading was $271.50 million, representing a 202.97% increase compared to the previous day.
- The recent rise in forex turnover was on the back of the Central Bank of Nigeria’s (CBN) recent circular to address suspected cases of excessive foreign currency speculation and hoarding from Nigerian banks.
- Similarly, the naira depreciated marginally at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,517/$1, a decrease of 1.78% against N1,490 it closed the previous day,
- The Great British Pound (GBP) depreciated marginally by 0.53% to close at £1/N1,895 as against £1/N1,885 the previous day while Naira also dropped against the Euro by 1.56% to close at N1600/EUR1 against NI595 / EUR1 reported the previous day.
In the cryptocurrency market where forex is sold using stablecoins, the Naira also crossed N1,549.13/$1.
Nairametrics reported that the Naira has lost about 68% of its value, marking a profound downturn since the implementation of the foreign exchange unification policy, according to data from Nairalytics.
In January 2024, the official foreign exchange rate surged to N1455.59/$, marking a significant depreciation from the previous rate of N464.67/$ in May 2023.
The situation in the parallel, or unofficial, market is equally grim, showcasing a descent from N763/$ to N1470/$ in the same timeframe, translating to a harrowing 48% devaluation.
This economic tremor is further underscored by the dip in Nigeria’s external reserves, which have dwindled from $35.09 billion to $33.35 billion over these months. It is projected that Nigeria’s foreign reserve will further drop to $24 billion this year.
