- The Nigerian currency has risen by 0.97% in the official market to trade at N1,650 per dollar from N1,675.62 it traded the previous day
- The naira’s value in the official market rose following the rise in foreign exchange turnover at $425.95 million
- Meanwhile, the naira depreciated in the parallel segment of the foreign exchange market, trading at N1,775, down from the N1,750 it previously
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira’s value improved by 0.97% in the official window on Tuesday, November 26, 2024, after CBN extended the deadline for Bureaux De Change Operators to recapitalise.
On Tuesday, November 26, 2024, the naira traded at N1,659.44 per dollar from N1,675.62 on Monday, November 25, 2024.
Credit: Bloomberg/Contributor
Source: Getty Images
Dollar supply rises in the official window
Data from the FMDQ Exchange indicates that traders in the forex market staked $425.95 million as turnover, leading to improved supply in the official window.
Willing buyers and willing sellers quoted the US dollar at a high of N1,705 and a low of N1,650 per dollar.
Meanwhile, the naira depreciated in the parallel segment of the foreign exchange market, trading at N1,775, down from N1,750 it traded on Monday, November 25, 2024.
The gap between official and black markets increases
Consequently, the margin between the official and parallel markets widened by N125 per dollar.
Experts believe the gap is enough to attract sellers who seek to make brisk profits in the parallel market.
Janet Ogochukwu, senior banker and economist, said that the naira’s value will continue to plummet until the Central Bank of Nigeria (CBN) begins its weekly currency defence.
“The CBN is keenly watching the naira spiral, not knowing it has contributed more to inflation.
“The CBN has raised interest rates by 25 basis points to combat inflation but has left the local currency to drift endlessly, causing more harm than inflation as virtually everything we consume in the country is imported,” She said.
There have been many predictions about the naira spiralling to about N2,000 per dollar on or before 2025, which analysts say will add to the overall hardship in the country.
Reports predict new FX rates
They say high demand for foreign exchange during Christmas will worsen the naira’s depreciation.
This is according to a project by Meristem Securities Limited in the Inflation Report released on Tuesday, November 19, 2024.
In the report, Meristem worried that the forex demand during Christmas would exacerbate the naira’s woes before the inflation rate.
The report disclosed that further upward pressure on the core index will be caused by rising transportation from elevated fuel prices.
The naira finally recovered against the dollar as new rates emerged
Legit.ng earlier reported that the Nigerian naira bounced back on Thursday, November 21, 2024, after days of depreciation in the official and parallel windows.
The naira gained 1.71% to close at N1,658.67 per dollar from N1,678.92 recorded on Wednesday, November 20, 2024.
The naira’s recovery comes after several days of depreciation, in which it hit its lowest value against the dollar at N1,689 per dollar on Monday, November 18, 2024.
Source: Legit.ng