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- The Nigerian currency, the naira, crashed further in the official foreign exchange window on Monday, November 11, 2024
- Data from the official window shows that the naira depreciated to N1,681 per dollar relative to N1,678 it traded on Friday, November 8, 2024
- In contrast, the naira appreciated in the parallel market from N1,740 to N1,730 per dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira closed at N1,681.42 per dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday, November 11, 2024.
The loss represents 0.2% or N2.55 relative to the N1,678.87 per dollar compared to the rate it traded on Friday, November 8, 2024.
Source: Getty Images
Naira appreciates in the black market
According to data from the FMDQ Exchange, the FX daily turnover declined by 66.34% to $471.50 million on Monday, November 11, 2024, from the amount recorded on Friday, November 8, 2024.
FX summary at the FMDQ shows that the traders quoted the dollar at a high of N1,695 per dollar and a low of N1,631.
Meanwhile, information from the parallel market dealers shows that the naira rallied to N1,730 per dollar from N1,740 it exchanged on Friday, November 12, 2024.
Abbas Yishau, a local currency trader in Lagos, disclosed that there was not enough demand for the dollar in the parallel market, which is why the naira was appreciated in the black market.
“There was a relative supply of the dollar in the black market, which is why the naira appreciated by N10.”Rewane predicts stronger naira in 2025
He urged the Central Bank of Nigeria (CBN) to intervene speedily to avoid further naira crashes.
The development comes as Bismarck Rewane, an economist and the managing director of the financial derivatives company (FDC), predicted that the naira would strengthen further in January of next year relative to its current rate.
Rewane disclosed this during his monthly Lagos Business Executive Breakfast Session presentation.
Mixed fortunes for the naira as reserves rise
The Nigerian currency has experienced mixed performance across all foreign exchange market segments in the past week.
The Central Bank of Nigeria (CBN) said the FX reserves hit record levels in 33 months, advancing 68 points weekly to settle at $40 billion.
Data from the FMDQ Exchange shows that the naira depreciated by 70 basis points against the dollar to settle at N1,678.87 per dollar.
However, the naira strengthened at the parallel market by 30 basis points against the dollar to close at N1,720 per dollar.
Rewane asks CBN to auction more dollars
Rewane disclosed that there is no economic basis for the naira to trade at less than 30% of its fair value in less than one year.
He expressed strong optimism that the naira would recover some of its losses in January.
According to him, the difference between the black market and the official window has disappeared.
He said the development was responsible for the 30% value depreciation due to speculative round-tripping.
The FDC boss said the CBN should announce a dollar sales programme similar to the T-Bill auction to help reduce market uncertainty.
Nigeria’s FX reserves Hit $40 Billion
Legit.ng earlier reported that the governor of CBN, Olayemi Cardoso, has announced that Nigeria’s FX reserves have reached more than $40 billion, the highest in 33 months.
During a symposium in Abuja, the CBN boss disclosed that the apex bank has achieved significant milestones under his leadership.
He disclosed that inflationary trends are now pointing downwards, showing the effectiveness of the bank’s interventions.
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Source: Legit.ng
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