In another blow to the Nigerian economy, the Naira witnessed a further depreciation against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, November 17, 2023. Data from FMDQ securities, the official trading platform for the Naira, revealed that the Naira closed the day at N841.14 against the US Dollar, marking a loss of N22.15 or 2.71% compared to Wednesday’s exchange rate of N818.99/$1.
During the trading session, the Naira hit an all-time low level of N1.140/$1 before settling at the closing rate. This continued decline raises concerns about the stability of the Naira in the face of economic challenges.
However, against other foreign currencies, there was a mixed performance. The Naira gained N18.10 against the Pound Sterling, closing at N1,029.74/£1 compared to N1,047.84/£1. There was also a slight improvement against the Euro, appreciating by N12.82 to close at N898.45/€1 compared to N911.27/€1, according to data from the Central Bank of Nigeria (CBN).
The situation was different in the parallel market, commonly known as the black market the Naira appreciated against the US Dollar, gaining 0.88% to close at N1,120/$1 after steadying at N1,130 for three consecutive days. In the Peer-2-Peer (P2P) window, the Naira depreciated against the Dollar by N1, settling at N1,114/$1 compared to the previous day’s N1,113/$1.
There are anticipations that the Central Bank of Nigeria (CBN) will intervene to increase the supply of dollars in the market, potentially easing the pressure on the Naira. Yemi Cardoso, who assumed the role of CBN Governor in September 2023, has yet to provide clarity on the trading band for the Naira or indicate when additional liquidity might be injected into the market. Some traders argue that the CBN’s lack of intervention in the official market since October has adversely affected the Naira’s value.
In related developments, Nigeria Customs recently adjusted the foreign exchange rate for clearing imported goods at Nigerian ports to reflect the Naira’s depreciation against the Dollar across foreign exchange markets. The new rates are expected to increase the cost of imported goods nationwide.