In a significant turn of events, the naira has fallen to N1,700 per dollar in the parallel foreign exchange market, marking its lowest point in seven months. This drop occurred on Friday, representing a 1.49% decrease from the previous day’s rate of N1,675/$.
This recent decline is particularly striking, as it mirrors the naira’s earlier low of N1,730/$ recorded on February 19. Currency traders in Lagos reported that the buying rate for the naira was N1,680/$, while the selling rate reached N1,700/$, creating a narrow profit margin of N20.
In contrast, the official market showed some resilience, with the naira appreciating by 2.24% from N1,576.1/$ to N1,540.78/$. The FMDQ Exchange, which monitors the official market, indicated that the naira was traded between a high of N1,691 and a low of N1,530 during the trading session.
The naira’s performance this week has been marked by fluctuations. On Monday, it opened at N1,665/$, slightly down from N1,663/$ the previous week. The downward trend continued, with rates falling to N1,670/$ on Tuesday and N1,680/$ on Wednesday, before recovering slightly to N1,675/$ on Thursday.
In the official market, the naira’s decline was similarly evident. It dropped from N1,541.52/$ on September 20 to N1,562.66/$ on Monday. The naira continued to depreciate, hitting N1,658.48/$ on Tuesday and N1,667.72/$ on Wednesday, before bouncing back to N1,576.1/$ on Thursday.
The Central Bank of Nigeria (CBN) is actively implementing strategies to improve liquidity in the foreign exchange market. CBN governor Olayemi Cardoso recently highlighted that multiple interest rate hikes have contributed to restoring confidence in the naira. The CBN’s ongoing reforms aim to streamline exchange rates, enhance market transparency, and reduce opportunities for arbitrage.
As the exchange rate landscape continues to shift, it is crucial for traders, investors, and consumers to stay informed about the naira’s performance and the broader implications of the CBN’s policies on Nigeria’s economy. The coming weeks will be telling as market dynamics unfold in response to these developments.
