The Nigerian currency experienced a setback against the US dollar, losing ground by N81 in the official market, trading at N1,154.08 per dollar. This marks the second time in a week that the naira has depreciated against the dollar, after inching closer to the N1,000 per dollar mark just a day earlier.
On Wednesday, April 17, 2024, the naira approached the N1,000 per dollar threshold in the official FMDQ Exchange, trading at approximately N1,070 to a dollar. However, contrary to expectations of further appreciation, the naira faltered on Thursday, April 18, 2024, slipping to N1,154.08 per dollar, a decline of N81.
In contrast, the parallel market saw the naira making gains, trading at N1,040 to a dollar, up from N1,100 the previous day, marking an increase of about N60. This narrowing gap between the official and parallel markets closed by N21 to a dollar.
Traders in the official market cited a spot rate for the naira ranging from a high of N1,220 per dollar to a low of N1,000, highlighting the disparity between the official and parallel exchange rates.
The decline in the value of the naira comes amidst statements from the Central Bank of Nigeria (CBN) refuting claims of using external reserves to defend the local currency against depreciation. CBN Governor Olayemi Cardoso clarified that the apex bank is not employing foreign reserves for this purpose, attributing the loss of reserves instead to debt repayment by the Nigerian government.
Additionally, the CBN denied reports of selling foreign exchange (FX) to Bureau de Change (BDC) operators at the rate of N1,001/$1, labeling such circulars as fraudulent. These developments underscore ongoing challenges in the forex market and raise questions about the factors influencing the naira’s performance against the dollar.
