On Wednesday, the Nigerian naira marginally fell versus the United States dollar as activity in the official foreign exchange market significantly slowed.Â
The Central Bank of Nigeria’s data shows the naira closed at N1,361.5 per dollar, weaker than the N1,356.5 reported in the last trading session.
The News Chronicle reports that the depreciation coincided with a dramatic decrease in market activity with complete turnover down some 57 percent. The number of finished transactions plummeted dramatically as trading volume fell from $125.69 million on a day before to $54.29 million.
Despite reduced market engagement, a narrow range of N1,357 and N1,361.5 per dollar in market data indicated relative stability for the naira.
As investors kept tabs on interest rate expectations in the United States and geopolitical events in the Middle East, analysts related the pressure on the local currency to a stronger US dollar globally.
Notwithstanding the setback, Nigeria’s foreign reserves kept their upward trend, reaching $50.89 billion. The increasing reserve buffer is meant to help the market stay liquid and encourage people to invest as the monetary authorities keep trying to make the foreign exchange market more stable.
