On October 2, 2024, the naira depreciated against the US dollar, closing at N1,669.15 in the official Investor and Exporter (I&E) window.
This marks an 8.25% decline from the previous closing rate of N1,541 recorded on the last trading day of September.
Market turnover also saw a notable decrease, dropping 2% from $181.86 million on Monday to $176.45 million on Wednesday.
Key Data Points
Closing Exchange Rate: The naira finished trading on October 2 at N1,669.15 per dollar, reflecting an 8.25% decrease from N1,541 on Monday.
Intra-Day Highs and Lows: Throughout the trading session, the naira showed volatility, reaching a high of N1,699.00 and a low of N1,550.00 before settling at N1,669.15.
Market Turnover: Turnover in the I&E window fell to $176.45 million, down from $181.86 million the previous day. For context, total turnover for September stood at $3.3 billion.
Parallel Market Rates: In the parallel market, the naira opened at N1,668.33 against the dollar, fluctuating between a high of N1,672.50 and a low of N1,668.33 before closing at N1,670.74.
Market Trends
Since the naira fell below the N1,600 threshold in July, it has encountered significant challenges, grappling with ongoing market volatility. Throughout this period, the currency has fluctuated between N1,500 and N1,600 as it strives to achieve stability, particularly during moments of dollar weakness.
In September, the naira’s price movements stagnated as it attempted to regain equilibrium amidst these fluctuating market conditions.
Year-to-date, the naira has depreciated by approximately 75%, a decline largely driven by surging inflation rates and a heightened demand for foreign currency.
On a more positive note, Nigeria’s external reserves have experienced a modest increase, rising from $36.305 billion at the end of August to $36.730 billion by mid-September.
What You Should Know
The Organization of the Petroleum Exporting Countries (OPEC) has dismissed a report suggesting that crude oil prices could fall to $50 per barrel, a claim linked to Saudi Arabia’s Oil Minister.
Additionally, the federal government has introduced tax reliefs for deep offshore oil and gas projects, along with VAT exemptions on LPG, CNG, diesel, and other products.
What to Expect
- With OPEC’s refutation of the report on declining crude oil prices, we can expect the stability of oil prices, and the naira.
- Furthermore, the federal government’s tax reliefs and VAT exemptions for offshore oil and gas projects could attract more investment in the sector.
- This increased investment could enhance production and export capacity, providing further support for the naira.
