Nigeria’s official exchange rate dropped to a month-to-date low of N1,300/$1 on Tuesday, April 23, 2024, according to data from the FMDQ, the official trading platform for foreign exchange.
This marks a 5.05% depreciation from the rate of N1,234.49/$1 observed at the beginning of the week, continuing the downward trend that began on Friday.
Over just 5 days, the exchange rate has weakened by 17.49%, raising concerns about the Central Bank’s ability to sustain recent gains.
Key Data Highlights:
- According to FMDQ data, the exchange rate closed at N1,300.15/$1, and the total daily turnover was $133.65 million.
- Daily turnover increased from $86.68 million on Friday to $110.17 million on Monday.
- Intra-day highs and lows were recorded at N1,317 and N1,000, respectively, with a disparity of around 30% on the upper and lower bands.
- Black market sources also reported the dollar quoting closer to N1300/$1 by late Tuesday, reflecting heightened demand amidst concerns of further devaluation.
- CBN data for April 22nd show Nigeria’s external reserves marginally climbing to $32.109 billion from $32.106 billion.
More Context:
Over the weekend, CBN Governor Yemi Cardoso declared the Naira the best-performing currency globally as of April 2024, attributing the achievement to foreign exchange market reforms and positive sentiment from international investment institutions.
Cardoso made this statement during a press briefing at the World Bank/IMF meeting in Washington DC.
The Naira’s journey saw it plummeting to its worst position in March, hitting lows of N1,600/$1 on the official market and N1,800/$1 on the parallel market.
Reports of dwindling external reserves and CBN interventions in currency defense prompted a response from the CBN Governor, who clarified that the bank was not defending the currency but allowing market forces to play their role.
In a recent move, the CBN issued a circular to all Bureau De Change (BDC) operators announcing a fresh forex sale at a reduced rate of N1,021 per dollar. This indicates the bank’s proactive approach to managing currency volatility and ensuring forex availability.
This initiative marks the second sale this month and the fourth in the year, following previous disbursements in February and at the beginning of April.
