Naira loses as dollar flows drop by 46.77%

Naira depreciated significantly at the official market, losing 13.78 percent as dollar flows dropped by 46.77 percent (N115.8) on Thursday.

The daily foreign exchange (FX) market turnover, which reflects the volume of transactions at the Autonomous Foreign Exchange Market (NAFEM) declined to $105.50 million on Thursday from $198.21 million recorded on Wednesday.

Consequently, after trading on Thursday one dollar was quoted at N956.33, as against N840.53 quoted on Wednesday at the NAFEM.

Willing buyers and willing sellers offered one dollar at a spot rate of N1,136, the highest ever bid and N615/$1, the lowest spot rate for Thursday.

Read also: Naira slides despite 61.86% dollar liquidity rise

At the parallel market, popularly called black market, naira depreciated against the dollar as the FX market closed at N1,150/$1 on Thursday, the same rate closed on Wednesday.

This represents 0.43 percent compared to N1,145/$1 exchanged on Tuesday.

The financial market and the public are expecting a pronouncement that will address the FX pressure as Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN) is expected to unveil the outlook for the economy in 2024 at the annual bankers’ dinner organised by the Chartered Institute of Bankers of Nigeria (CIBN) on Friday in Lagos.

“I expect the CBN governor to outline his vision for monetary policy, notably their plans to improve foreign exchange liquidity and realignment of the naira. I’ll also expect him to talk about the Monetary Policy Committee (MPC) meetings,” Tunde Abidoye, equity research analyst at FBN Capital, said.

Read also: Naira weakens across FX markets as dollar shortage lingers

For Ayodeji Ebo, managing director/CBO, Optimus by Afrinvest, “What most people are interested in is the dollars. When and how are they getting the dollars? That is where the conversation and questions may likely go. When is the $10 billion coming and how do they intend to get it? I think that is the most fundamental thing that anybody wants to hear.”

Nigeria’s Central Bank postponed its rate-setting meeting for a second time since Cardoso was nominated to the post in September. On September 21, 2023 CBN postponed MPC scheduled for September 25-26, 2023.