Naira Troubles Continue in 2024, Crashes to Lowest Level in History Against US Dollar
- Nigerian currency is starting the new year at its lowest level against the US dollar in the official foreign exchange market
- Data shows that the Naira crashed against the US dollar in the official market on the third trading day of 2023
- The poor performance is amid reassurances from the federal government that 2024 will be a better year for the Naira
The Nigerian currency, the Naira, has dropped to its lowest level in the foreign exchange market, continuing its weak performance into the second trading session of the year.
Data from FMDQ securities showed that the Naira crashed against the US dollar to N1,035.12/$ in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, January 3, 2023.
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This represents a 4.7% or N46.66 loss compared to the preceding day's exchange rate of N988.46/$1.
The poor performance of the Naira was evident as more transactions were carried out on Wednesday.
Data shows a total of $85.68 million exchanged hands among traders, reflecting a 457.1% increase, or $70.3 million more than the $15.38 million quoted on Tuesday.
Naira against Pounds, Euro
Also in the official market, data from the Central Bank of Nigeria shows the Naira also weakened against the Pound Sterling in the official market during the session by N10.54 to sell for N1,155.11/£1 compared with the previously traded rate of N1,144.57/£1.
While against the Euro, it lost N7.39 to trade at N1,002.49/€1, in contrast to the preceding day's value of N995.10/€1.
Naira to dollar exchange rate unofficial market
The Naira faced a similar outcome in the unofficial exchange markets - the Peer-to-Peer (P2P) and the parallel market.
Checks conducted by Legit.ng reveal that in the P2P segment of the market, utilised mainly by fintechs and crypto exchanges, the Naira depreciated by N10, concluding at N1,213/$1 compared to the previous day's rate of N1,203/$1.
Similarly, in the parallel market, the Nigerian currency weakened by N10 against the dollar on Wednesday to close at N1,230/$1 compared to the previous day's exchange rate of N1,220/$1.
Musa Abdullahi, a forex trader at Ikeja, in a chat with Legit.ng however said that despite the weak start, the naira will appreciate in the coming days.
"Most businesses are still not operating at full capacity, resulting in slow demands. The naira is anticipated to come under intense pressure by the second week of January unless the CBN has enough dollars to meet the demands."
Tinubu's govt sets new Naira to dollar exchange rate target
Earlier, Legit.ng reported that the federal government has expressed optimism about the naira exchange rate for the coming year.
Ben Akabueze, the DG of the Budget office, also believe that the exchange rate target for 2024 can be achieved.
The Naira in 2023 recorded its worst performance in the official and unofficial foreign exchange market.
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Source: Legit.ng
