The Naira experienced a reversal in fortunes against the U.S. Dollar, recording a marginal decline after a previous day’s appreciation. The official market saw the domestic currency close at N832.32/$1, representing a 0.10% depreciation. The intraday high and low were N1137/$1 and N700.00/$1, respectively, showcasing a wide spread. Forex turnover decreased by 17.76% to $115.41 million, according to NAFEM data.
Despite efforts by the Central Bank of Nigeria (CBN) to stabilize the exchange rate, the Naira has continued to depreciate. Economists, including Mr. Olatunde Amolegbe and Bismarck Rewane, emphasize the importance of market and participant confidence for exchange rate stability. Amolegbe suggests that structural changes, improved security, infrastructure, foreign direct investments, and local production encouragement are crucial for a stable currency. Rewane predicts ongoing volatility due to forex supply concerns, leading to speculative dollar buying and naira shorting.
Key Points:
– Naira closes at N832.32/$1, a 0.10% decline, reversing previous gains.
– Intraday high and low recorded at N1137/$1 and N700.00/$1, indicating significant fluctuations.
– Forex turnover decreases by 17.76% to $115.41 million.
– Parallel forex market maintains a flat exchange rate of N1160/$1.
– Economists stress the importance of market confidence and structural changes for exchange rate stability.
– Dollar scarcity leads to speculative buying, contributing to ongoing naira volatility.
