The exchange rate between the naira and the US dollar depreciated by 3.61% at the official Investor and Exporter (I&E) window on Monday, September 10, 2024.
According to data from FMDQ, which tracks official currency transactions, the naira’s depreciation on September 10 had the naira fall to N 1637.59.
The exchange rate experienced a depreciation that made it cross the N1,600 zone compared to yesterday’s close at N1,580.46.
Key Data Points
Closing Exchange Rate: The naira closed at N1,637.59 on Tuesday, September 10, 2024, representing a 3.61% drop from its previous close of N1,580.46 on Monday.
Though this reflects short-term volatility, investors remain watchful for stabilization.
Intra-day Highs and Lows: During the trading session, the naira reached an intra-day high of N1,655.00/$1 and a low of N1,499.00/$1, as the currency tried to find a balance against the dollar.
Market Turnover: The day’s market turnover stood at $143.15 million, lower than the $197.37 million recorded on the previous trading day.
Meanwhile, total market turnover reached $3.25 billion in August 2024, compared to $4.34 billion in July, representing a decline of $1.08 billion.
Parallel Market Rates
In the parallel market, exchange rates ranged between N1,646.38 and N1,638.02, remaining slightly above the official window rate.
Market trends
Since mid-July, the naira has fluctuated within the N1,600 range, reaching a high at N1,660 before closing at N1,619 last Friday.
After appreciating at N1,580.46 on Monday, September 9, the currency closed above the 1,630 zone.
Year-to-date, the naira has depreciated by approximately 86%, driven by inflationary pressures and increasing demand for the dollar. Nevertheless, Nigeria’s external reserves stand at $34.66 billion as of July 2024.
What You Should Know
Global crude oil prices have been experiencing downward pressure and crude oil is a critical factor in Nigeria’s foreign earnings.
Brent crude futures dipped below $70 per barrel for the first time since December 2021, driven by concerns over global supply and demand.
U.S. West Texas Intermediate (WTI) crude prices also fell by 42 cents, or 0.6%, to $68.29 per barrel.
What to expect
- While the naira’s recent decline highlights ongoing volatility, a brighter outlook remains possible as global markets continue to shift.
- Crude oil prices, a critical factor in Nigeria’s foreign earnings, are currently under pressure, but corrective measures could ease the strain on the naira.
- If oil prices stabilize or improve, the naira could strengthen against the dollar alongside positive sentiment.
- Moreover, the implementation of efficient economic measures will be key to maintaining investment confidence and fostering a more stable exchange rate.
