The Nigerian naira experienced a challenging start to the New Year, depreciating by 8.97% against the US dollar on the first trading day of 2024. Despite a $2.25 billion injection from the African Export-Import Bank (Afreximbank) to alleviate the country’s forex crunch, the naira closed at N988.46/$1. The depreciation occurred despite Afreximbank’s disbursement of part of its $3.3 billion forex support facility to the Nigerian government, aimed at addressing liquidity shortages in the FX market since the unification by the Central Bank of Nigeria (CBN) in June 2023. Forex turnover at the close of trading was $15.38 million, reflecting an 82.78% decrease compared to the previous day.
Key Points:
- The naira closed at N988.46/$1, representing an 8.97% depreciation from the previous closing of N907.11/$1.
- The intraday high and low were recorded at N1130/$1 and N744.50/$1, respectively.
- Forex turnover at the close of trading was $15.38 million, marking an 82.78% decrease compared to the previous day.
- Afreximbank’s $2.25 billion release from the $3.3 billion forex support facility aimed at easing liquidity challenges hasn’t shown immediate positive effects as traders maintain positions.
- The parallel forex market saw the naira exchange at N1,220/$, a 0.41% depreciation, while peer-to-peer trading occurred at N1,209.75/$, representing a 0.89% decline from the last trading day of December 2023.
The situation highlights the ongoing challenges in Nigeria’s forex market despite efforts to address liquidity shortages.
