Dollar Crashes in Official Market as Supply Rises to $5.4 Billion

• The US dollar crashed in the official foreign exchange market on Tuesday, November 5, 2024
• The Nigerian currency, the naira, rallied in the FX market, gaining N6 against the US dollar to close at N1,671 from N1,676
• The development follows an increase in dollar supplies in the FX market in October 2024 to $5.4 billion

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The US dollar suffered a mild setback in the Nigerian Autonomous Foreign Exchange Market on Tuesday, November 6, 2024.

The development led to the appreciation of the Nigerian naira, gaining N6 in the official market.

Naira appreciates by 0.33%

The naira appreciated 0.33% in the official FX market to close at N1,671.32 per dollar from the N1,676 it traded the previous day.

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The naira’s N6 gain comes amid an increase in FX turnover in NAFEM, hitting $218.77 million.

Data from the FMDQ Exchange shows that willing buyers and willing sellers quoted the dollar a high of N1,687 and a low of N1,591.55, leaving a margin of N95.45.

The development comes as the volume of dollar supplies, also known as turnover, in the Nigerian Autonomous Foreign Exchange Market (NAFEM) increased monthly by 74% to $5.4 billion in October from $3.31 billion traded in September.

The naira ends October poorly

Data from the FMDQ Exchange shows that turnover stood at $12.64 billion in the first quarter of 2024 and declined by 19% every quarter to $10.24 billion in the second quarter of 2024.

In the third quarter of this year, turnover rose by 6.4% to $10.9 billion.

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Again, naira crashes against US dollar, pound in official forex markets

However, the Nigerian currency, the naira, depreciated in the official and parallel markets in the month under review.

The naira lost 8.6% of its value, depreciating by N133.45 to N1,675.49 per dollar in the official FX market, from N1,541.94 per dollar traded in September end.

Gap between official and parallel markets narrows

Also, the naira fell by N25 or 98% in the parallel market. According to investigations, the naira's exchange rate rose to N1,730 per dollar in the black market at the end of October from N1,795 per dollar in September.

As a result, the margin between the black market and the official window narrowed to N54.61 per dollar from N163.06 recorded in September.

CBN crashes dollars to clear imported goods from ports

Legit.ng previously reported that the Central Bank of Nigeria (CBN) has significantly crashed the foreign exchange rate for importers to clear goods from the nation’s air and seaports.

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This development comes amid the recent recovery of the local currency, the naira, in the official Nigerian Autonomous Foreign Exchange Market (NAFEM).

Legit.ng earlier reported that the naira appreciated from N1,670 on Monday, October 28, 2024, to N1,650 per dollar on Tuesday, October 29, 2024, due to increased dollar supplies in the FX market.

Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng

Source: Legit.ng