The exchange rate between the naira and the dollar plunged to N1,419/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), marking a disappointing start to the week.
This depreciation marks the first time the exchange rate has slipped beyond N1,400/$1 and is the lowest recorded since March 22nd this year, when it closed at N1,431/$1 on the official market.
This decline also signifies the eighth consecutive weakening of the exchange rate since its last peak at N1,072/$, when Nigerians celebrated the apex bank’s foreign exchange policies.
Market Highlights:
According to data from the FMDQ, the exchange rate closed at N1,419/$1 compared to N1,339.23/$1 on Friday.
During the day, the intra-day high and low recorded weakened to N1,450 and N1,160, respectively.
Total forex turnover also declined, plummeting to $147.83 million, a significant drop from the $309 million recorded Friday.
With just one day left in April, total forex turnover stands at $3.2 billion. This is a notable decrease compared to the $5 billion recorded in March, indicating lower forex turnover in April.
The external reserve continued its gradual rise, reaching $32.13 billion, slightly higher than the $32.109 billion reported last week.
Reasons for Depreciation:
The recent depreciation can be attributed to rising demand for dollars, a stronger U.S. dollar, and higher inflation rates. Additionally, a noticeable drop in forex turnover has contributed to the decline.
According to Cardoso, market forces are expected to sustain the volatility in exchange rates, suggesting ongoing fluctuations in the near future.
