How the naira appreciated in the official market as dealers quote new rates

• The Nigerian currency, the naira, rose in the official window on Friday, October 4, 2024, trading at N1,631 per dollar
• The naira’s appreciation represents 1.69% in the official market from the previous day’s rate of N1,659.26 per dollar
• The local currency’s improvement came as trading volume dipped to $238.36 million

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian currency, the naira, gained against the US dollar in the official Nigerian Foreign Exchange Market (NAFEM) on Friday, October 4, 2024.

The naira closed the week positively, rising by 1.69% at N1,631.21 in the official window following global crude oil prices rise.

The Nigerian currency, the naira appreciated against the dollar Credit: Bloomberg/Contributor
Source: Getty Images

Market turnover decreases in the official market

Despite a sharp decline in market turnover, the 1.69% naira appreciation contrasts with the previous day’s rate of N1,659.26.

The local currency’s improvement came as trading volume dipped to $238.36 million, a 47% drop from the previous day's $450.39 million.

Traders in the official market quoted the dollar at a high of N1,670.00 and a low of N1,560.00 before settling at N1,631.21 per dollar.

Data from the FMDQ Exchange shows that market turnover dropped sharply compared to the previous day’s rate of $450.39 million, with September recording a total turnover of $3.3 billion at NAFEM.

Naira gains in the parallel market

In the parallel segment of the foreign exchange market, the naira opened trading at N1,669.49 per dollar and closed at N1,618 after hovering between N1,673.34 and N1,618,00 per dollar.

Experts say the naira experienced a sluggish move as it sought to stabilise amid volatility in the FX market.

The Nigerian currency faced tremendous pressure in March after trading at N1,300 per dollar. The naira traded at N1,500 in August and depreciated for most of September.

The naira lost about 75% of its value annually, driven primarily by rising inflation and growing demand for FX.

Expert predicts mixed performance for naira

Nigeria’s FX reserves rose again, reaching $39.07 billion as of September 19, 2024. 

Senior banker and economist Janet Ogochukwu said the naira’s gain was due to the rise in the price of crude oil.

She said the naira can continue gaining if the government increases crude oil production.

“At the moment, crude oil is the only guaranteed export product Nigeria can boast about.“So, increasing production is key to stabilising the naira and the economy. However, she said that Nigerians should not hope for the naira to revert to N1,000 per dollar anytime soon as the government deliberately devalued it.”

Customs slash exchange rate to clear goods

Legit.ng previously reported that the Central Bank of Nigeria (CBN) had reduced the exchange rates for cargo clearance at the nation's seaports and airports.

According to information on the official trade portal of the Nigerian Customs Service (NCS), the Nigeria Customs duty rate now stands at N1637.692 a dollar as of Monday, September 30, 2024.

The new rate reflects a slight reduction from N1,666.219 per dollar on Friday, September 27, 2024.

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Source: Legit.ng