Nigeria’s official exchange rate fell to a month to date low of N1,300/$1 on Tuesday April 23, 2024 according to data from the FMDQ, where the exchange rate trades officially.
This represents a 5.05% depreciation from the N1,234.49/$1 reported on the first day of the week, continuing with the weakness that started on Friday.
The exchange rate has now weakened by 17.49% in a matter of 5 days as concerns mount over the central bank’s ability to sustain the gains recorded in recent weeks.
Key data highlights
According to data from the FMDQ, the exchange rate closed at at N1,300.15/$1 on a total daily turnover of $133.65 million.
- Daily turnover has also increased from the low of $86.68 million and $110.17 million recorded on Friday and Monday respectively.
- The intra-day high and lows recorded for the day were N1,317 and N1,000 respectively as the disparity hovered around 30% on the upper and lower band.
- Black market sources also suggest the dollar was quoting closer to N1300/$1 by late Tuesday as demand spiked in line with concerns of a further devaluation.
- The CBN data for April 22nd also reveal Nigeria’s external reserve position climbed marginally to $32.109 billion from $32.106 billion a few days earlier.
More Context
Over the weekend, the Central Bank Governor, Yemi Cardoso stated that the Naira has been declared the best performing currency globally as of April, 2024.
- This achievement follows a series of foreign exchange market reforms and is supported by positive sentiment from leading international investment institutions, he declared.
- Cardoso made this remark in a press briefing on the sidelines of the just concluded World Bank/IMF Press briefing in Washington DC, United States.
- The Naira had the unenviable position of being the worst currency in the country in March when it fell to as low as N1,600/$1 on the official market and N1800/$1 on the parallel market.
Citing the drop in external reserves, reports that the central bank has been defending the naira also triggered a response from the CBN Governor, who opined the bank was not defending the currency.
Rather he pointed that the “ups and downs” being observed from due to the effect of market forces.
Meanwhile, the Central Bank issued a new circular to all Bureau De Change (BDC) operators announcing a fresh sale of forex at reduced rate of N1,021 per dollar.
This initiative represents the second such occurrence this month and the fourth instance this year, underlining the CBN’s proactive strategy in managing currency volatility and ensuring the availability of essential foreign exchange.
- In February 2024, the CBN initially distributed $20,000 to each BDC, charging a rate of N1,301 per dollar.
- Subsequent adjustments were made during the second disbursement when the bank halved the allocation and lowered the rate to N1,251 per dollar.
- More recently, at the beginning of this month, the apex bank made another sale, offering $10,000 to each BDC at a rate of N1,101 per dollar.
