Naira Makes Slight Recovery After Exchanging at N815 Against Dollar at Official Forex Market

• The naira experienced a significant fall against the U.S. dollar at the official market crossing the N800 mark for the first time
• This was driven by an increase in the market reaction to the Central Bank of Nigeria's announcement of floating the naira
• Analysts have projected a continuous drop in value, except there are enough foreign currencies to meet importers' and investors' demands

The Nigerian currency, the naira, continued its free fall against the American dollar across the various foreign exchange (FX) market segments as players reacted to the Central Bank of Nigeria (CBN) exchange rate liberalisation.

Data from FMDQ securities showed an exchange rate between the naira and dollar hit an intra-day high of N815/$ at the official Investor & Exporter Window on Wednesday, June 21, 2023.

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This is the highest rate naira has exchanged against the dollar on the official market.

However, at the end of Wednesday's trading, Nigerian currency recovered some of its value to close the day's business at N763.17/$.

Nevertheless, the closing rate represents a N6.56 or 0.87% depreciation compared to Tuesday's closing value of N756.61/$1.

Naira value at unofficial market

The Nigerian currency also weakened at the unauthorised parallel and Peer to Peer forex market on Wednesday.

Checks by Legit.ng show that in the P2P arm of the market, used mainly by online forex customers, the naira lost N9 of its value against the dollar to exchange at N785/$1 compared to Tuesday's value of N776/$1.

While in the black market, the local currency lost N5, trading at N765/$1 compared to the rate of N760/$1 in the preceding session.

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Expert insight on naira to dollar exchange rate

Analysts project that the naira will continue to fall in the coming days but will find its actual value later.

JP Morgan, an American multinational financial services firm, in a recent report, noted that the naira is expected to appreciate and trade at about N600 to the dollar in the coming months.

Also, KPMG Nigeria projected that the country's foreign exchange (FX) rate would settle between N650/$ to N750/$.

However, this will largely depend on how many foreign currencies Nigeria can attract into the country.

After 18 days of Tinubu's presidency, Nigeria's foreign reserves hit 2-year low

Meanwhile, in another report, Legit.ng revealed that Nigeria's foreign reserves are declining very fast, and they are currently at one of their lowest after shedding $600 million in the first few days of President Bola Tinubu's government.

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Naira bounces back as dollar exchanges same rate in official and black markets first time in 8 years

Nigeria's foreign reserves comprise foreign banknotes, deposits, bonds, treasury bills and other foreign government securities.

Foreign reserves are an essential tool for the Central Bank of Nigeria in providing buffers for the Naira.

Source: Legit.ng