Naira Plummets to N841/$1 in Official Market as Forex Demand Surges
The naira suffered a massive depreciation against the dollar in the official market on Friday, hitting a record low of N841/$1. The local currency lost N78.25 or 10.25 per cent of its value from N763/$1 on Tuesday, as foreign exchange demand soared after the Eid-el-Kabir holiday.
According to data from FMDQ Exchange, the official market did not open on Wednesday and Thursday due to the public holiday. On Friday, the market witnessed a high volatility, with the dollar trading between N461.50/$1 and N841/$1. The naira eventually closed at N769.25/$1, indicating a 0.82 per cent depreciation from the previous session.
The spike in foreign exchange demand was reflected in the increased turnover in the investors and exporters (I&E) window, where forex transactions rose by 7.24 per cent to $263.45 million on Friday, from $245.65 million on Tuesday.
Meanwhile, the naira fared better in the parallel market, where it gained some ground against the major foreign currencies. According to Naira Rates, a parallel market aggregator, the dollar fell by N2.3 or 0.3 per cent to N764.3/$1 on Friday, from N766.6/$1 on Tuesday.
However, sources at the Bureau De Change (BDC) segment of the parallel market quoted a higher rate of N775/$1 for the dollar on Sunday, July 2, 2023.
The naira also appreciated against the British pound and the euro in the parallel market on Friday.
The pound dropped by N11.9 or 1.19 per cent to N980.9/£1, from N992.8/£1 on Tuesday, while the euro declined by N8.8 or 1.03 per cent to N843.2/€1, from N852/€1 on Tuesday.
The appreciation of the naira is a welcome development for the Nigerian economy. It will make imports cheaper and help to boost exports. It is also likely to attract foreign investment into the country.
However, it is important to note that the naira is still a volatile currency and its value could fluctuate in the coming days and weeks.
Overall, the appreciation of the naira is a positive development for the Nigerian economy. It is a sign that the economy is recovering and that investors are becoming more confident in the country.
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