Naira Sets One of The Lowest Exchange Rate Records in Official Market, Steadies at Black Market
- The Nigerian currency plummeted against the Naira on Thursday, November 23, 2023
- Traders at the official NAFEM market traded the Naira at N956.33 to a dollar, one of the lowest it has traded.
- The Naira also steadied on the black market, trading at N1,160 per dollar on Thursday
Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Nigerian currency, the Naira, hit a new low on Thursday, November 23, 2023, closing at N956.33 to a dollar in the official Nigeria Autonomous Foreign Exchange Market (NAFEM).
The Naira depreciated by 12.11% to close at N956.33 to a dollar at the close of business on Thursday, November 23, 2023, per data from NAFEM.
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Dollar supply drops at the official market
The depreciation represents an N115.8 loss, a 12.11% drop compared to the N840.53 it closed on Wednesday, November 22, 2023.
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The lowest Naira has dropped since the Nigerian government began floating was recorded in early November when it depreciated to N996.75 per dollar.
Traders quoted an intraday high of N1,136 per dollar, while the intraday low recorded N615 per dollar, representing a difference of N521 to a dollar.
Forex turnover at NAFEM was around $105.50 million, representing a 46.77% decline from the day before.
The Naira steadies at the black market as analyst points way forward
Also, the Naira steadied on the black market by 1.29% at N1,165 per dollar.
On Thursday, the pressure on the foreign exchange (FX) market eased as naira steadied against the United States dollar in the parallel market.
According to Aboki FX, the naira sells for N1,160 on Wednesday and Thursday, November 23, 2023, respectively.
The black market exchange rate remained unchanged after moving from N1,145, on Tuesday to N1,160 on Wednesday.
Chartered accountant and a financial & risk expert, Olabode Afolayan, disclosed that to sustain the momentum, the citizens must cut their appetite for foreign-made goods and De-dollarize the economy.
According to him, importation is putting so much pressure on the naira saying, there should be a change of mindset by Nigerians.
"We need to have a change of mindset and be more patriotic. We need to buy more of home made items than importation. Though the question of why people not buying Nigerian-made things is due to quality, we need to do what the Chinese did by going local.
"We need to start producing our own televisions, our engineering students in the universities should be able to get a build local technology for this, we need to start manufacturing en-mass," he advised.
Afolayan further stated that the government should encourage export, saying the country's exports must be more importation.
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He also urged the government to clamp down on Nigerians hoarding the dollars as they are more powerful as the government is doing more to maintain momentum against the dollar.
"We need not to sabotage the effort of the govt and the government should talk to those hoarding the dollar because they are the Big Boys of Nigeria and not ordinary Nigerians.
When they hoard, the government should clamp down on them because the government is doing everything to make naira appreciate by clearing the forex backlogs and clearing trapped funds of foreign airlines. I learned the government cleared some of these outstanding hence the naira was appreciated.
Also, the government should look inward, ensuring export is more than import, and with that, the naira will sustain its momentum against the dollar, " Afolayan stated.
On June 14, 2023, CBN announced the collapse of the exchange rate windows with the willing buyer and willing seller model.
Analysts believe it will take longer for the Forex market to converge, considering the shortage of Forex in the country.
Currency in circulation hits all-time high, returns to pre-naira redesign periods
Legit.ng reported that data from the Central Bank of Nigeria shows that currency in circulation in Nigeria has increased to N2.299 trillion in October 2023, the highest since this year.
The amount represents 115.10% compared to the N1.39 trillion recorded in January this year and 8.33% higher than the N2.76 trillion in September.
In October last year, the apex bank withdrew the old N200, N500, and N1000 notes from circulation. It issued new designs, resulting in a temporary decline in currency in circulation as Nigerians exchanged their old naira notes for new ones.
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Source: Legit.ng
