Naira Depreciates as Currency Traders Quote N1,311 per Dollar in Official Market
- The naira depreciated against the US dollar again in the official market despite the $2 billion paid by CBN to 14 banks
- The Nigerian currency recorded an intraday high of N1,311 per dollar and a low of N745
- The naira finally depreciated to N925.35 per dollar in the official market
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The Nigerian currency continued its woeful performance against the US dollar on Monday, January 22, 2024, as naira’s intraday high hit N1,311 per dollar and intrade day low recorded N745 per dollar.
The naira opened trading in the official market at N928.34 per dollar as traders jostled for the few greenbacks available.
Source: Getty Images
The naira depreciates in the official market
It later appreciated marginally to N925.35, gaining just N2.54, according to the Nigerian Autonomous Foreign Exchange Market (NAFEM) data.
The naira depreciated to N925.35 on Monday, January 22, 2024, from the N908 it closed on Friday, January 19, 2024.
The development comes as the Central Bank of Nigeria said it paid about $2 billion in Forex backlogs to 14 banks.
Legit.ng reported that CBN has cleared the entire foreign exchange forwards liability of 14 banks.
According to reports, a CBN official disclosed Wednesday that settlements with foreign airlines have also begun.
Nigeria has $7billion in mature FX forwards
This is a significant worry for investors as foreign currency shortages continue to cause the naira to depreciate despite assurances from the apex bank to clear the backlogs.
Reuters reports that about $2 billion of the backlog across sectors such as manufacturing, aviation, and petroleum has been settled, per a statement from acting CBN spokesman, Hakama Sidi Ali.
She said an independent forensic review of the backlog authorised by the CBN revealed serious infractions, abuse, and significant non-compliance with the market regulations.
Ali said the CBN would enforce appropriate sanctions against offenders in partnership with relevant security agencies.
The financial institutions regulator said it was committed to cleaning up the financial services industry to enhance market confidence.
Naira's performance follows a new ranking showing the world's strongest currencies.
ABCON finally exposes the reasons behind the naira depreciation
Legit.ng reported that Bureau de Change operators have raised the alarm that some Nigerians are hoarding their savings in USD due to the depreciation in the value of the naira.
The National President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, said that there was a need for the FX market to be liquid.
The ABCON boss noted that the $2.2 billion released by Afrexim Bank was insufficient to stimulate the market and significantly impact naira’s value.
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Source: Legit.ng
