The naira appreciated against the U.S. dollar, closing at N1,561.76 in the official Investor and Exporter (I&E) window, as global oil prices remained steady above $77 per barrel.
This appreciation marks a shift in Nigeria’s foreign exchange market, reflecting a 4.49% rise from the previous day’s rate of N1,635.15.
The uptick in the naira’s value coincided with a surge in market turnover, which doubled to reach $253.68 million compared to the prior day’s $126.24 million.
Key Data Points
Closing Exchange Rate: On October 8, the naira closed at N1,561.76 per dollar, showing a 4.49% gain from the prior rate of N1,635.15.
Intra-Day Highs and Lows: Throughout the trading session, the naira fluctuated, reaching a high of N1,650.00 and a low of N1,540.00, before settling at its final rate of N1,561.76.
Market Turnover: The day’s total turnover in the I&E window surged to $253.68 million, a significant increase from the previous day’s volume of $126.24 million. For additional perspective, the cumulative turnover for September stood at $3.3 billion.
Parallel Market Rates: In the parallel market, the naira opened at N1,619.3 per dollar, showing slight fluctuations between a high of N1,620.09 and a low of N1,618.72, before closing at N1,621.03.
Market Trends
The broader trend shows that Nigeria’s exchange rate has struggled throughout the year. Year-to-date, the naira has depreciated by over 70%, starting at N907.11/USD in January and sliding above N1,500/USD as of October.
In early 2024, the naira experienced a steep decline, peaking at N1,616.53 per dollar in February—a record high.
However, March saw a brief recovery fueled by positive market sentiment, with the currency closing around N1,303.
By early April, the naira dipped below the N1,100 mark, even closing the second week at N1,002. Yet, this recovery proved temporary, as the currency steadily weakened again, reaching N1,668.97 by the end of September.
What to Expect
- This new arrangement is expected to ease some pressure on Nigeria’s foreign exchange reserves. By sourcing jet fuel locally from the Dangote Refinery, airline operators can better shield themselves from the volatility of global crude oil prices, potentially lowering their operational costs.
- This strategic move could attract increased investment interest, boosting market confidence and supporting the naira’s further appreciation.
- Positive developments like these could play a crucial role in stabilizing the economy, providing a more favorable outlook for the local currency.
