More Than N1,500/$: Naira Hits New Record Low After CBN Sets Limits on Banks' Forex Operations

• The Nigerian currency depreciated further in the unofficial market on Wednesday, January 31, 2024
• The new record is in tune with analysts' earlier prediction that the naira will worsen in 2024
• In the official market, however, the naira waxed stronger from its record low the previous day

The naira continued its decline on the last day of the month to close at a new low on Wednesday, January 31, 2024.

The Nigerian currency declined to a new low of N1,515 per dollar at the unofficial market against the N1,491 per dollar it closed the previous day.

In the early hours of the day, Legit.ng reported that the naira continued its massive depreciation against the US dollar to break above N1,500

The new record marks a 1.6% low in one day to affirm the expectation of analysts who had earlier predicted the local currency would worsen in 2024.

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No more N1,500/$: Naira bounces back, rises by over N160 against US dollar in hours

Legit.ng earlier reported that financial experts predicted that the naira could close 2024 between N1,500 and N1,800 per dollar.

This followed the ongoing decline of the naira against major currencies, which has become a cause of concern for Nigerians and the government.

Naira gains in the official market

The naira bounced back to gain on Wednesday from its lowest record the previous day in the official market.

The local currency closed at N1,455.59 per dollar on the last day of the month. This represents a N26.98 gain or a 1.85% increase compared to the N1,482.57 per dollar it closed on Tuesday.

FMDQ data showed that the intraday high reached  N134.07 per dollar, while the intraday low plunged to N789 per dollar, representing a wide spread of N720 per dollar.    

Data from the official NAFEM window indicates that there was $134.07 million in currency turnover at the end of trading, which was 85.36% higher than the day before.

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As Naira hits N1,500, BDC operators shut down business, give reasons

CBN sets limits for banks

Recently, the Central Bank of Nigeria (CBN) has imposed limits on how much banks can hold in foreign currencies.

In a circular released on Wednesday, January 31, 2024, the CBN expressed concerns about the growth of forex exposures on their balance sheets as the naira depreciates against the US dollar.

In the new circular, the CBN addresses banks' net open position (NOP) limits on foreign currency assets and liabilities.

Meet Africa's worst currency

Legit.ng reported that the Zimbabwean dollar emerged as Africa's and the world's weakest currency against the US dollar.

The currency weakened on Tuesday, January 30, 2023, trading above 10,000 against the US dollar in the spot market.

The decline is the first time since the currency was reintroduced in 2019.

Source: Legit.ng