New Exchange Rate as Naira Records First Loss in Over One Week Against US Dollar

• The Nigerian currency, the naira, has depreciated against the US dollar after days of strong performance
• New data showed that the naira depreciated in the official market but stable in the unofficial market
• The CBN's decision to adopt a retail auction approach to help ease the pressure on the naira for days

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience and in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Nigerian naira has recorded its first depreciation in over a week against the US dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX).

Data from FMDQ securities shows that naira weakened in value to N1,582.09/$1 on Tuesday, August 13, 2024.

The new exchange rate represents a 10.71% or N11.10 depreciation compared to the previous day's closing rate of N1,570.99/$1.

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The fall of the naira is primarily due to the slight decrease in the forex supply by 18.3%, or $45.01 million, to $201.43 million from $246.44 million recorded the previous day.

In the last few days, the naira has performed strongly following the Central Bank of Nigeria (CBN) Retail Dutch Auction System (RDAS) conducted on August 6, 2024, where $876.26 million was sold at N1,495 per dollar to end users whose bids were submitted by 26 banks.

The CBN's move aimed to improve supply to the foreign exchange market and promote price discovery.

However, it seems the results from the auction have petered out.

Naira against pound, euro

It is the same story for the naira against the pound sterling in the official market.

The CBN data showed naira recorded a loss of N13.77 against the pound to close at N2,018.06/£1 compared with the previous trading session's N2,004.29/£1.

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Naira triumphs against dollar For 7 days in a row after CBN auctioned FX to dealers, sets new Rate

While against the euro, the naira depreciated by N10.1 to settle at N1,724.59/€1, in contrast to Monday's closing value of N1,714.49/€1.

Also, the CBN revealed that one West African CFA France now exchanges at N2.61.

Naira to dollar at unofficial market

The poor run for the naira continued in the parallel market, also known as the black market.

Traders who spoke to Legit.ng said the naira exchange rate was unchanged at N1,595/$1.

UK firms predict exchange rate in 2024

Earlier, Legit.ng reported that two UK-based financial institutions predicted a new exchange rate for the naira against the dollar.

Goldman Sachs and Standard Chartered opined the naira would rebound and close stronger in 2024.

Their predictions were based on the current reforms by the Cardoso-led CBN.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng