The Nigerian naira has experienced a notable decline against the US dollar, reversing some of the gains recorded in recent weeks. According to new data from FMDQ Securities, the naira closed at N1,562.66 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, September 24, 2024. This marks a 1.37% drop from Friday’s closing rate of N1,541.22 per dollar.
During Monday’s trading session, the naira fluctuated significantly, reaching as high as N1,675/$1 and dropping to a low of N1,540/$1 before settling at N1,562.66 by the close of business. Foreign exchange transactions also saw a sharp decrease, with total turnover falling by 47% to $100.21 million, compared to $190.57 million in the previous session.
The naira also weakened in the parallel market, where it is being sold at N1,666 per dollar. Meanwhile, updated exchange rates from the Central Bank of Nigeria (CBN) indicate that the naira trades at N2,067.96 per pound sterling and N1,762.42 per euro. In the unofficial black market, the pound is being exchanged at N2,245, while the euro stands at N1,845.
The drop in the naira’s value comes ahead of the Central Bank of Nigeria’s Monetary Policy Committee (MPC) meeting, scheduled for September 23 and 24, 2024. Economists and financial experts are keenly watching the CBN’s decision on monetary policy rates, which could influence the future trajectory of the naira. Optimism surrounds the potential for the naira to recover, particularly following the recent decision by the US Federal Reserve to lower interest rates, which may weaken the dollar and provide room for the naira to strengthen.
Market analysts believe that if Nigeria can leverage these global financial trends effectively, it could help boost investor confidence and support the naira’s recovery in the foreign exchange market. However, much will depend on the outcome of the CBN’s policy deliberations.
