Naira fall continues as market records highest rate of N1,550

The naira continued its free fall on Wednesday, after some months of stability as the foreign exchange (FX) market recorded N1,550 as the highest bid rate of the trading day.

After trading on Wednesday, the naira depreciated slightly by N2.53 as the dollar was quoted at N1,538.68 compared to N1,536.15 quoted on the previous day on the Nigerian Foreign Exchange Market (NFEM), data from the Central Bank of Nigeria (CBN) indicated.

The authorised currency dealers quoted the dollar at the highest rate of N1,550 on Wednesday, marking a N10 depreciation from N1,540 quoted on Tuesday. The market recorded the lowest rate of N1,532 per dollar on Wednesday as against N1,520 on Tuesday.

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At the parallel market, popularly called black market, the naira also depreciated against the dollar on increased demand for the greenback by the end users. The naira closed at N1,585 per dollar, slightly lower than N1,580/$ closed on Tuesday.

The naira also depreciated against other currencies on the black market. Pound traded at N2,020 on Wednesday as against N2,010 on Monday. Similarly, Euro was quoted at N1,690 on Wednesday, marking a N30 loss to the naira from N1,660 per one Euro quoted on Monday, on the black market. The Canadian dollar closed steady at N1,150.

The Naira weakened against the US Dollar in both the official and parallel markets last week, despite the Central Bank of Nigeria (CBN) intervening in an attempt to stabilise the currency, demand pressure was primarily driven by foreign investors seeking to move funds back offshore, analysts at Coronation Asset Management.

In the NAFEM market, the Naira fell by 1.13% closing at N1,517.24/US$1. In the parallel market, the Naira also depreciated, losing 4.46%, to settle at N1,570.00/US$1. The consistent decline in value across markets highlights possible FX liquidity challenges despite the CBN’s efforts to intervene and the depletion of foreign exchange reserves over the last nine weeks.

The CBN’s published gross foreign reserves declined by 0.18% (or US$67.57m) last week to close the week at US$38.35 billion.