The Nigerian naira recorded marginal appreciation at both the official and parallel markets by the end of November, according to data from FMDQ and Bureau de Change (BDC) operators.
In the official market, the naira strengthened against the dollar by 0.17%, improving from an opening rate of N1,675.49/$1 at the start of the month to N1,672.69/$1 by month-end.
Similarly, in the parallel market, the naira appreciated by 0.40%, moving from N1,750/$1 at the beginning of November to N1,743/$1 by the end.
The naira’s appreciation in the parallel market extended to other key currencies, gaining 1.76% against the pound to close at N2,230/£1 and 1.88% against the euro, closing at N1,830/€1 by the end of the month.
Official Market Performance:
The naira closed at N1,672.69/$1 in the official market at the end of November, showing a 0.17% gain from the opening rate of N1,675.49/$1 on November 1. The strongest exchange rate for the month was N1,644.86/$1 on November 28, while the weakest was N1,690.37/$1 on November 18.
Parallel Market Performance:
In the parallel market, the naira appreciated by 0.40% over the course of November, moving from N1,750/$1 at the beginning of the month to N1,743/$1 by month-end. The currency hit its highest rate at N1,725/$1 on November 12 and its lowest at N1,755/$1 on November 22 and 26.
The naira experienced fluctuations early in November but saw a recovery towards the end of the month. Trading volumes increased significantly, reaching $1,403.76 million on November 8, up from $244.96 million the day before. While the official market saw depreciation at the start of the month, the parallel market showed appreciation during the first two weeks before facing depreciating towards the end.
Factors influencing the naira include increased importation due to government exemptions on import duties and VAT on food items, weak global energy demand affecting Nigeria’s crude oil prices, CBN interventions to stabilize exchange rates, and the potential reduction in import dependency with the Dangote Refinery allowing local fuel purchases.
With oil prices below $80 per barrel, Nigeria’s revenue is at risk, impacting inflation and naira stability. Inflation, forex supply, and economic policies will continue to influence the naira’s trajectory. While November showed some improvement, long-term stability hinges on economic reforms and global economic conditions. Increased imports during the holiday season may lead to heightened dollar demand, posing renewed pressure on the naira. Nairametrics Research foresees potential lows between N1,700/$1 and N1,750/$1 in the official market, and up to N1,800/$1 in the parallel market.
