The intraday high recorded was N1137/$1 as the naira fell marginally against the U.S. dollar at the official market and closed flat at the parallel market on Thursday 30th November 2023.
This marks a reversal from the gain achieved the previous day when the Naira appreciated at N831.47/$1 at the official market.
The domestic currency depreciated 0.10% to close at N832.32 to a dollar at the close of business on Thursday, data from the NAFEM where forex is officially traded, showed.
This represents a 0.85 kobo loss or a 0.10% decline in the local currency compared to the N831.47 it closed on Wednesday.
- The intraday high recorded was N1137/$1, while the intraday low was N700.00/$1, representing a wide spread of N437/$1.
- According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $115.41 million, representing a 17.76% decrease compared to the previous day.
However, the naira closed flat at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1160/$1 the same as it closed the previous day, while peer-to-peer traders quoted around N1168.55/$1.
The Central Bank of Nigeria (CBN) has been trying to manage the naira’s exchange rate through several measures, however, these measures have not been able to prevent the naira from depreciating against the dollar.
What economists are saying
The former President and Chairman governing council of, the Chartered Institute of Stockbrokers (CIS) and the Managing Director, of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe in an exclusive chat with TheTimes said for the exchange rate to be stable, market and participants confidence is key.
- “Confidence is what makes foreigners want to come to invest in your country and make locals want to keep their investments here.
- “In the absence of these dynamics, demand will naturally outstrip supply and you see the sort of instability we are experiencing now.
- “I think the decision to clear FX commitment backs will be positive for market confidence, but the desired impact might manifest in the medium term rather than in the short run.
- “I also think the efforts at using monetary policy tools to reduce system liquidity could ultimately reduce currency speculation but again it’s not a silver bullet.
- “Deliberate efforts need to intensify at effecting structural changes that will encourage import substitution such as improved security, better infrastructure increased foreign direct investments, and encouraging local production,” he said.
Managing Director/CEO, of Financial Derivatives Company Limited, Bismarck Rewane had said in a report that the naira is expected to remain volatile on lingering forex supply concerns.
The dollar dearth means speculative buying is likely to continue, with an increasing number of market participants taking long positions on the dollar while shorting the naira.