In a concerning development, the Naira experienced a significant depreciation, reaching an unprecedented low of N1,043.09 against the US dollar in the official foreign exchange market on Thursday. This marks a stark contrast to the N872.59/$ rate recorded just the day before at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Dealers report that this rate surpassed the N885.88/$ quoted on the Friday preceding the Christmas holidays. Data from the Financial Markets Dealers Quotations (FMDQ) reveals a notable 38.81% increase in dollar supply, surging from $92.16 million on Friday to $127.93 million on Wednesday.
The influx of the dollar was attributed to active participation in the FX auction at NAFEM by both buyers and sellers. The spot trading saw the dollar quoted at N1,235.65, demonstrating strength compared to the $1,248 rate on the preceding Friday. However, for the lower spot rate, the dollar traded at N740, a decrease from N700 on Friday.
These fluctuations in the foreign exchange market coincide with a broader trend, as the Naira has been labeled one of the worst-performing currencies globally in 2023. Bloomberg’s recent report accentuates this, suggesting that the Naira is on track for its bleakest year since the restoration of democracy in 1999, with analysts foreseeing further depreciation in 2024. This alarming assessment underscores the challenges facing the Nigerian economy and calls for careful monitoring in the coming months.
