Traders, Currency Dealers Quote Dollar at New Rate as Naira Continues Losing Streak
- The Nigerian currency, the naira, has continued its fall in the official and parallel markets as demand increases
- Information from FMDQ shows that the naira depreciated from N1,536 per dollar to N1,541.70 on Wednesday, January 8, 225
- Analysts have predicted a challenging month for the naira as demand for forex rises in the new year
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
After a few days of rallying in the Electronic Foreign Exchange Market (EFEMS), the Nigerian naira continued its losing streak into the new year.
The local currency recorded three days of losses in EFEMS despite moderate demand for the naira in the first week of 2025.
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Naira continues losing streak
Data from the FMDQ Exchange showed that the naira opened trading on Wednesday, January 8, 2025, at N1,536 per dollar and closed at N1,541.70, representing a 0.30% depreciation.
Traders quoted the dollar at a high of N1,544 per dollar and a low of N1,536.50 in the foreign exchange market.
The Nigerian currency began the new year strong in EFEMS, trading below N1,540 as of Thursday, January 2, 2024.
The naira rallied to N1,538 per dollar on the first trading day of the year, giving hope for a more robust currency in the new year.
The gain continued on Friday, January 3, 2025, when the naira broke into the N1,537 per dollar ceiling.
The naira falls after a few days of gain
The naira also fell in the parallel segment of the foreign exchange market, trading at N1,655 from N1,650.
Several predictions have been made that the naira will fall close to N2,000 in the new year.
However, some analysts say the naira will experience some reprieve as Nigeria reduces petroleum product and food imports in the new year.
Experts predict mixed fortunes for the naira
They say the pressure on the naira, caused by FX scarcity, will be lifted as Nigeria becomes a net exporter of petroleum products in 2025, with the commencement of production of the Dangote, Port Harcourt and Warri refineries.
Janet Ogochukwu, senior banker and economist, predicts a tough January for the local currency, saying that Nigerians should expect more pressure on the naira in the first two weeks of the month.
“Pressure on the naira will rise in January as people seek forex for imports, trade, and school fees. Also, diasporan Nigerians are returning and will need forex for travel.
“These demands will affect the naira’s performance in the first two weeks of January. We can expect some stability towards early February when market activities settle,” she said.
Dollar demand drops as traders quote new FX rates
Legit.ng earlier reported that dollar demand dropped by 11% in the third quarter of last year due to a dip in invisible transactions.
The development shows a significant decline in the previous quarter as FX uses for non-tangible transactions declined by 32% to $2.2 billion.
Recent data shows that the Nigerian currency ranked first among Africa’s worst-performing currencies, ending 2024 at N1,547 per dollar.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
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Source: Legit.ng
