On Monday, September 9, 2024, at the official Investor and Exporter (I&E) window, the naira’s value increased to N1,580.46 against the US dollar.
In comparison to the N1,619.95 reported in the previous trading session on Friday, this indicates a gain of 0.81%.
Data from FMDQ, which monitors transactions involving official currency, supports this.
Over the past few days, the exchange rate has fluctuated between above and below ₦1,600, indicating that it is still quite unpredictable.
Important Data Points:
Closing Exchange Rate: On Monday, the naira recovered to N1,580.46 from the previous close of N1,619.95 on Friday.
Highs and Lows for the day: Significant fluctuations in official rates were evident in the naira’s intraday high of N1,660/$1 and low of N1,570/$1, which occurred during the day’s trading.
Market Turnover: The market’s turnover increased to $197.37 million from Friday’s $185.79 million.
In August 2024, the total turnover was $3.25 billion, a significant drop from $4.34 billion in July 2024, indicating a $1.08 billion fall.
Rates on the Parallel Market:
Rates in the parallel market, where the currency is transacted, varied between N1,606.78 to N1,650.00, staying marginally lower than the official window rate.
Market Trends:
The naira has been moving in and out of the N1,600 zone since mid-July; on Friday, it closed at N1,619 after reaching a high of N1,660.
Up to now, the naira has lost around 86% of its value, mostly as a result of rising market demand for dollars and inflation.
As of July 2024, Nigeria’s external reserves were valued at $34.66 billion.
What To Note
In order to meet market demand, the Central Bank of Nigeria (CBN) has announced intentions to sell $20,000 to qualified Bureau De Change (BDC) operators at a rate of N1,580/$1.
In a statement signed by the Trade & Exchange Department Director, Dr. W.J. Kanya, the CBN instructed BDCs to sell to end users at a price no higher than 1% over the purchase rate of N1,580/$1.
By making more dollars available on the market, this move seeks to relieve the pressure on the naira and prevent further depreciation.
Expectations
The latest changes in the global economy will keep the exchange rate unstable. The past several days have seen a decline in oil prices, which continued on Monday.
For the first time since 2011, traders have made the most pessimistic wagers on crude oil prices, and one of their main concerns is the increase in the world’s oil supply.
In spite of OPEC’s intentions to reduce its supply of crude oil, Brent Crude dropped to $71.65 per barrel.
Should the price of crude oil keep declining, Nigeria’s dollar earnings may suffer and the exchange rate may encounter difficulties.
