The naira has appreciated against the US dollar, closing at N1,580.46 at the official Investor and Exporter (I&E) window on Monday, September 9, 2024. This marks a 0.81% gain from the previous closing rate of N1,619.95 recorded on Friday.
Data from FMDQ, which monitors official currency transactions, indicates that the exchange rate has exhibited moderate volatility, fluctuating around the ₦1,600 mark in recent days OBSERVEDRSTIMES
Key Market Highlights:
• Closing Exchange Rate: The naira ended the trading session at N1,580.46, recovering from N1,619.95 on Friday.
• Intra-day Highs and Lows: During trading, the naira reached an intra-day high of N1,660/$1 and a low of N1,570/$1, showcasing significant variability.
• Market Turnover: Total market turnover was $197.37 million, an increase from $185.79 million on Friday. August’s total turnover was $3.25 billion, down from $4.34 billion in July, reflecting a decline of $1.08 billion.
Parallel Market Overview:
In the parallel market, unofficial exchange rates ranged from N1,606.78 to N1,650.00, remaining slightly below the official rate.
Market Trends:
Since mid-July, the naira has fluctuated within the N1,600 range, peaking at N1,660 before closing at N1,619 on Friday. Year-to-date, the naira has depreciated by approximately 86%, primarily due to inflation and rising demand for dollars. Nigeria’s external reserves stood at $34.66 billion as of July 2024.
CBN’s Strategic Move:
The Central Bank of Nigeria (CBN) has announced plans to sell $20,000 to eligible Bureau De Change (BDC) operators at a rate of N1,580/$1 to alleviate market demand. The CBN directed that BDCs sell to end-users at no more than 1% above the purchase rate, aiming to ease pressure on the naira and prevent further depreciation by increasing dollar availability.
Future Outlook:
The exchange rate is expected to remain volatile amid recent global economic developments. Oil prices have recently declined, with Brent Crude falling to $71.65 per barrel, despite OPEC’s plans to cut crude supplies. Continued drops in oil prices could negatively impact Nigeria’s dollar earnings and pose challenges for the exchange rate moving forward.
