Naira Sets New Exchange Rate in Official, Parallel Markets as Dollar Supply Drops
- The naira crashed to the lowest in history in the official foreign exchange market on November 12, 2024
- The naira was exchanged for N1,689.88 per dollar from the N1,681. It was traded the previous day
- Official data shows that the daily FX supply in the market sank to $106.44 million from $471.50 million on Monday, November 11, 2024
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, set a new exchange rate record in the official window on Tuesday, November 12, 2024, when it hit an all-time low.
The naira exchanged at N1,689.88 per dollar, the first time in the currency’s history against the US greenback.
The development comes amid a historic drop in the daily forex turnover in the FX market.
Source: Getty Images
Dollar supplies drop in FX market
Data from the FMDQ Exchange shows that the naira lost 0.5% of its value against the dollar to close at N1,689.88 against the N1,681.42 it traded the previous day.
A decline in foreign exchange turnover saw daily forex market activity drop to $106.44 million from $471.50 million on Monday, November 11, 2024.
The data shows that willing buyers and willing sellers quoted the dollar at a high of N1,695 and a low of N1,631 per dollar, showing a considerable margin.
The naira, however, remained steady in the parallel market at N1,740 per dollar despite volatility in the official window.
Nigerians expect further naira crash
A survey by the Central Bank of Nigeria (CBN) on business expectations shows that businesses expect further naira depreciation in November and over the next six months.
Meanwhile, Nigeria’s foreign reserves rose to $40.8 billion as of November 7, 2024, marking a significant 21.4% increase from the $33.02 billion recorded at the beginning of the year.
Economic experts have said the naira will crash lower to N2,000 per dollar on or before December 2024.
Senior banker and economist Janet Ogochukwu said that the projection that the naira will fall to N2,000 per dollar before the end of the year may be accurate.
“Looking at all the indices on the table, the naira is headed towards that route. The current rate of N1,689.88 per dollar makes it all the more plausible.
“However, the situation can be remedied by the timely intervention of the CBN in the forex market to stall the naira’s crash,” she said.
According to her, Nigeria’s inflation and other economic woes are due to a weak naira. She asked the Nigerian government to adopt a managed currency float as in other climes.
Expert projects new exchange rates for naira
Legit.ng previously reported that Bismarck Rewane, an economist and the managing director of the financial derivatives company (FDC), predicted that the naira would strengthen further in January 2025 relative to its current rate.
Rewane disclosed this during his monthly Lagos Business Executive Breakfast Session presentation.
The Nigerian currency has experienced mixed performance across all foreign exchange market segments in the past week.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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