The naira weakened against the U.S. dollar on October 9, 2024, closing at N1,625.13 in the official Investor and Exporter (I&E) window, as crude oil futures slipped slightly to around $76 per barrel.
This recent movement represents a shift in Nigeria’s foreign exchange dynamics, with the naira declining by 4.06% compared to the previous trading day’s closing rate of N1,561.
Market turnover in the I&E window also dropped significantly, falling by 49% to $170.60 million from the $253.68 million recorded the day before.
Key Data Points:
Closing Exchange Rate: On October 9, 2024, the naira closed at N1,625.13 per dollar, marking a 4.06% decrease from the previous day’s rate of N1,561.76.
Intra-Day Highs and Lows: Throughout the trading session, the naira experienced fluctuations, reaching a peak of N1,652.00 and a low of N1,560.00 before finally closing at N1,625.13.
Market Turnover: The day’s total dollar volume traded in the I&E window fell to $170.60 million, a considerable drop from $253.68 million on the prior day. For broader context, total turnover in September amounted to $3.3 billion.
Parallel Market Rates: In the parallel market, the naira opened at N1,619.22 per dollar, with minor fluctuations that saw it reach a high of N1,621.35 and a low of N1,618.41 before ending the day at N1,618.85.
Market Trends:
Throughout 2024, Nigeria’s exchange rate has faced continued pressures, leading to substantial devaluation. Since the beginning of the year, the naira has depreciated by over 70%, having started at N907.11/USD in January and crossing the N1,500/USD threshold by October.
Early in 2024, the naira saw a sharp depreciation, reaching a record high of N1,616.53 per dollar in February.
A brief period of optimism in March led to some recovery, with the naira stabilizing around N1,303 per dollar.
However, this positive trend was short-lived. By early April, the naira fell below N1,100, even closing the second week of that month at N1,002.
Despite this temporary reprieve, the currency resumed its decline, reaching N1,668.97 by the end of September.
What to know
Brent crude prices dipped to $76 per barrel as global oil markets experienced a slight decline in prices.
Meanwhile, the pump price of petrol rose to N1,030 per liter, as fuel stations in some parts of the country adjusted their prices to reflect this recent increase.
What to expect:
- The hike in fuel prices could exacerbate inflation, as manufacturers might pass on the increased costs to consumers, given that the production and transportation of many goods rely heavily on affordable energy.
- Major market players, who base their decisions on economic fundamentals, will need more favourable conditions to maintain confidence in the market.
- As such, further positive developments will be crucial to attract sustained investment interest in Nigeria’s currency markets.
