Naira Falls by Over N200 Against US Dollar in Official Market
- The value of Nigerian currency depreciated on Tuesday after two days of strong performance
- New data shows that the Naira weakened across all FX markets against the United States dollar
- Nigerians are hoping that the new year (2024) will be a better year for the Naira in the FX markets
Legit.ng journalist Dave Ibemere has over a decade of experience covering business and the economy
The Naira has reversed the two-day gain recorded on the official and unofficial foreign exchange markets.
Data from FMDQ securities showed that the Naira at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the official market, closed at N1,089.51 against the US dollar on Tuesday, January 9, 2023.
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This indicates that the naira weakened by 27.2% or N232.94 compared to Monday, January 8, with an exchange rate of N856.57/$1.
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Tuesday's rate is the first time the Naira has depreciated against the US dollar since Friday at the official market.
Why did the Naira depreciate?
The weakening of the Nigerian currency comes as forex traders could not meet the strong demand of their customers.
However, the value of transactions rose by 63.3% or $37.79 million to $97.45 million from the $59.66 million achieved a day earlier.
There is hope for the Naira as the federal government continues to push to clear backlogs of foreign payments.
Also, the disbursement of $2.25 billion out of the $3.3 billion foreign exchange (FX) facility from the African Export–Import Bank (Afreximbank) will be a major boost for CBN's fight to ensure the dollar supply.
Naira to Dollar at unofficial market
It is the same story for the Naira in the peer-to-peer (P2P) window, as data shows the Naira declined against the Dollar on Tuesday by N6 to sell at N1,230/$1 compared with the previous day's N1,224/$1.
However, it is good news in the black market, also known as the parallel market, as the Naira appreciated by N5 to quote at N1,240/$1 on Tuesday compared with the previous trading day's value of N1,245/$1.
Speaking on why the naira appreciated in the black market, Umar Hassan a BDC operator in Ikeja, explained:
"For now, we have no strong demands for dollars, and there is positive sentiment that the CBN now has enough dollars, so people are worried about buying dollars high when it could fall in days.
"But I can assure you, the dollar will continue to stay strong because of the lack of enough supply in the official market."
Nigeria Customs sets new exchange rate to clear imported goods
Earlier, Legit.ng reported that Nigeria customs adjusted the foreign exchange rate for clearing imported goods at Nigerian ports
The new rates were intended to reflect the depreciation of the Naira against the Dollar across the foreign exchange markets.
With the new rate, the cost of imported goods will increase nationwide.
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Source: Legit.ng
