The naira suffered another setback on Wednesday as it slumped to a record low of N951.22/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEX) window, where forex is officially traded.
The local currency depreciated by 15.19% or N144.49 from the N806.73/$1 it closed on Tuesday, according to data from the NAFEM tracked by Nairametrics. This is the lowest level ever recorded by the naira since the NAFEM was introduced in 2017.
The naira experienced a wide fluctuation during the trading session, reaching an intraday high of N1159.10/$1 and an intraday low of N701/$1, indicating a spread of N458.1/$1.
The forex turnover at the NAFEM window also declined by 4.94% to $135.58 million on Wednesday, compared to the previous day’s figure of $142.58 million.
The naira’s woes were attributed to the persistent scarcity of forex in the country, as the Central Bank of Nigeria (CBN) struggles to meet the demand from importers, manufacturers, and other end-users.
The CBN has been intervening in the forex market through various channels, such as the Investors and Exporters (I&E) window, the Bureau De Change (BDC) operators, and the banks, but the supply has been inadequate to meet the demand.
The naira’s performance at the parallel market, where forex is sold unofficially, was slightly better, as it appreciated by 0.43% to close at N1165/$1 on Wednesday, while peer-to-peer traders quoted around N1173.51/$1.
However, the naira lost some ground against other major currencies, such as the British Pound, the Euro, and the Canadian Dollar.
The naira closed at N1,455/£1 against the Pound, losing N20 from the N1,435/£1 it closed on Tuesday. The naira also closed at ₦1,250/€1 against the Euro, shedding N5 from the ₦1,245/€1 on Tuesday. The naira also closed at N910/CA$1 against the Canadian Dollar, losing N10 from the N900/CA$1 on Tuesday.
The naira’s outlook remains uncertain, as the forex scarcity persists and the demand pressure mounts. Analysts have called for more reforms and policies to boost the forex inflow and stabilize the exchange rate.
