Naira falls to all-time low of N860 per dollar

Nigeria’s currency on Wednesday fell to all-time low of N860 per dollar at the parallel segment of the foreign exchange (FX) market, also called the black market.

The naira depreciation followed strong demand for dollars by individuals and importers who want to travel for summer holidays and business, a trader said.

One of the traders who gave his name as Bala said, “there’s dollars in the market, and we have buyers too”.

The foreign exchange market opened on Wednesday with naira depreciating to N830. This represents 3.48 percent (N30) lost in naira value in less than 12 hours.

At the Investors’ and Exporters’ (I&E) forex window, naira also weakened by 6.83 as the dollar was quoted at N793.70 on Wednesday as against N742.93/$1 quoted on Tuesday, data from the FMDQ indicated.

Willing buyers and sellers maintained bids as high as N853.00 and N699.50, lower bids were recorded during the FX market auction.

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The daily foreign exchange market turnover increased significantly by 152.35 percent to $87.19 million on Wednesday from $34.55 million recorded on Tuesday.

On June 14, 2024 the CBN collapsed all segments of the FX market into I&E window, Nigeria’s official foreign exchange market, and re-introduced the willing buyer and willing sellers.

Consequently, the official exchange rate rose from N463.38/$ to N793.70, the current rate.

Despite the CBN’s floating of the naira, a large supply deficit remains in the fx market, said analysts at FBNQuest.

“Therefore, we expect substantial volatility in the naira exchange rate, at least in the near term. Also, we do not see an increase in liquidity from foreign portfolio investors as they will likely remain on the sidelines until they can repatriate a substantial proportion of their trapped fx funds, estimated at roughly USD3bn. In this context, we see an end-year rate of N825/USD,” the analysts said.

According to the analysts, sweeping reforms revamped the foreign exchange market, uniting fragmented market segments, eliminating trading restrictions, and bridging the gaping chasm between the official and parallel market rates. These actions aim to attract investments and stimulate economic growth.

“We are optimistic that the policy reforms investors have embraced will steer the nation towards a positive growth trajectory and lay the foundation for sustainable growth,” the analysts said.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.