Naira Crosses New Threshold as Traders Quote Dollar at Higher Rates in Official Window
- The value of the Nigerian currency, the naira, declined by 3.61% on Tuesday, September 10, 2024.
- Traders in the official window quoted the Nigerian currency at N1,637.46 per dollar as against the N1,580 it traded the previous day
- The foreign exchange declined to $197.37 million from the amount recorded the previous day
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The exchange rate between the naira and the dollar declined by 3.61% at the official window on Monday, September 10, 2024.
Data from the FMDQ Exchange shows that the naira depreciated to N1,637.59 to a dollar.
Source: Getty Images
The naira reaches new intraday high
The depreciation saw the naira cross the N1,600 ceiling from the N1,580.46 per dollar it traded on Monday, September 9, 2024.
The FMDQ data shows that the Nigerian currency closed trading at N1,637.46 on Tuesday, September 10, 2024, reflecting continued volatility in the official window.
Willing buyers and willing sellers quoted the naira at a high of N1,655.00 per dollar and a low of N1,499.00, leaving a gap of N155 per dollar.
FX turnover declines
The foreign exchange turnover experienced a decline, reaching $197.37 million from the amount recorded the previous day.
According to reports, total FX turnover for August stood at $3.25 billion, compared to the $4.34 billion traded the previous month, representing a loss of 1.08 billion.
Traders in the parallel market segment of the Nigerian foreign exchange market quoted the naira at N1,646 and N1,638 per dollar.
The gap between the official and parallel market windows narrowed to N9 per dollar.
Since July, the naira has experienced continuous volatility, hovering around the N1,600 mark before hitting the N1,600 briefing and closing at N1,619.
The naira has depreciated by 86% since the beginning of this year, driven by currency reforms embarked on by President Bola Tinubu’s government.
Experts predict more decline for the naira
A currency dealer in the parallel market, Abbas Yishau, told Legit.ng that the demand for the US dollar has intensified as traders seek more FX to import goods following the 150-day duty-free window announced by the Nigerian government
“Many buyers tell us that they are in a haste to beat the deadline and do not want to wait for the official window due to the hassle of buying there.
“So, the current pressure is mainly from importers and those seeking to return or send their children abroad for studies,” he said.
Janet Ogochukwu, a senior banker and economist, said the naira crossing a new threshold is unsurprising because of the high demand for the US greenback.
“The pressure is real and is driven by high demand and unmet needs. We forecast that due to the mounting demands, the naira will hit N1,800 per dollar on or before December.,” she said.
CBN leaves customs FX rates for cargo clearance
Legit.ng earlier reported that the Central Bank of Nigeria (CBN) may have heeded experts’ warnings about constantly changing the Customs exchange rates for cargo clearance to leave them at N1,000 per dollar quarterly.
The development comes as the Customs Exchange rates for cargo clearance remained unchanged for almost one week.
Information from the Customs trade portal shows that the last time the CBN tweaked the Customs FX rates was September 5, 2024, when it crashed from N1,625.88 per dollar to N1,564.929.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
