Naira Crashes Further Against Dollar As New Rate Emerges

The official Investor and Exporter forex window recorded a decline in the value of the naira on Thursday.

This development was attributed to a 46.77% decrease in US Dollar supply.

Data from the FMDQ Securities Exchange revealed a 13.78% drop from the previous day’s closing rate of N840.53 against the US Dollar. The volume of dollars traded also decreased, with turnover falling from $198.21 million on Wednesday to $105.50 million.

The day commenced with the naira trading at N800.90 against the US Dollar, experiencing fluctuations throughout, ranging from a high of N1136/$ to a low of N615/$. Ultimately, it concluded trading at N956.33/$.

Despite the Central Bank of Nigeria’s efforts to address foreign exchange forward contract backlogs, the naira remains unstable. Recent World Bank data indicates the naira as one of the worst-performing currencies globally, having lost about 40% of its value since June.

The Economic Intelligence Unit of the Economist Group emphasizes that the CBN’s inability to meet foreign exchange demand is expected to continually strain the naira. It states, “In Nigeria, an unsupportive monetary policy implies that the naira will remain under pressure, while the central bank lacks the firepower to adequately supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors unnerved. High inflation and a continued spread with the parallel market will leave the exchange rate regime unstable and result in periodic devaluations.”