The exchange rate between the Nigerian naira and the US dollar depreciated to N1,562.66 at the official Investor and Exporter (I&E) window on Monday, September 23, 2024.
This represents a 1.37% decline from the N1,541.22 recorded on September 20, 2024, as the naira lingered within the N1,500 range, a level it has struggled to maintain amid fluctuating market conditions.
Market Turnover also dropped by 47% from $190.57 million on Friday to $100.21 million on Monday.
Key Data Points
Closing Exchange Rate: The naira closed at N1,562.66 on September 23, 2024, marking a 1.37% drop from the previous close of N1,541.22.
Intra-day Highs and Lows: During Monday’s trading session, the naira saw volatility, reaching a high of N1,675.00/$1 before dipping to a low of N1,540.00/$1, eventually stabilizing at N1,562.66 by the end of the day.
Market Turnover: Turnover in the I&E window dropped sharply, reaching $100.21 million on September 23, a 47% decrease from the $190.57 million traded the previous session.
August saw a total market turnover of $3.3 billion, which was also a drop from July’s $4.34 billion, indicating a persistent slowdown in dollar liquidity.
Parallel Market Rates: The naira opened at N1,639.45 in the parallel market, experiencing moderate volatility. It fluctuated between N1,644.68 and N1,615.51 during the day, ultimately closing at N1,638.62.
Market Trends
Since mid-July, the naira has mostly remained in the N1,600 range, facing persistent challenges in appreciating against the dollar.
This is a continuation of the depreciation observed earlier in the year, after the naira fell to the ₦1,400 zone in May.
Year-to-date, the currency has lost approximately 76% of its value due to rising inflation and increasing demand for foreign exchange, driven by Nigeria’s heavy reliance on imports and dollar-denominated transactions.
Despite these pressures, Nigeria’s external reserves have seen slight improvement. Between August 30 and September 10, reserves rose from $36.305 billion to $36.730 billion.
What to Know
Nigeria is close to obtaining approval from the World Bank for three significant loan projects totaling $1.5 billion.
As per World Bank information, these loans are expected to be approved by September 26, 2024.
The funds will be directed toward supporting governance reforms, healthcare initiatives, and the development of critical infrastructure across the country.
What to Expect:
- The impending $1.5 billion loan from the World Bank is anticipated to have a positive impact on Nigeria’s economy, which may help bolster the naira.
- If managed effectively, the loan could ease economic pressures, reduce inflation, and improve the purchasing power of the naira.
- Additionally, an increase in foreign exchange reserves stemming from this loan could lessen the strain on the naira, stabilizing its value against the dollar.
