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Official exchange rate closes week at N1,665.50/$1 amidst demand pressure and forex decline  

The Naira experienced a decline against the US Dollar in the official market, concluding the week at N1,665.50/$1, amid sustained demand pressures that continued to exert downward pressure on the currency’s value. 

This decrease in the exchange rate coincided with a notable downturn in forex turnover, which plummeted by 21% to $151.93 million. 

Additionally, the situation was exacerbated by a significant surge in inflation, as reported by the National Bureau of Statistics (NBS) for January 2024.  

The inflation rate rose to 29.90%, marking a substantial increase from the 28.92% recorded in the previous month. 

This data reflects a noteworthy uptick in the headline inflation rate for January 2024, with 0.98% points increase compared to December 2023 figures. 

According to data from the NAFEM (Nigeria Autonomous Foreign Exchange Market), where forex is officially traded, the domestic currency depreciated by 5.66% at the end of the week, closing at N1,665.50 to a dollar at the close of business.Top of Form 

In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,708.40/$1.   

Market analysts attributed the current state of Naira to a consistent uptick in the demand for dollars that has persisted.  

TheTimes reported that the Federal Government has insisted that the ongoing reforms in the foreign exchange market is beginning to yield results, with the naira stabilizing and the forex market experiencing surge of inflows. 

The government stated that it has directed relevant regulatory and enforcement agencies to deal with speculators and other unscrupulous players within and outside the country who are engaged in malpractices capable of undermining the naira. 

This disclosure is contained in a press statement issued by the Minister of Information and National Orientation, Mohammed Idris, on Friday, February 23, 2024. 

Mohammed in the statement said that the latest figure from the National Bureau of Statistics (NBS) showed that capital importation into Nigeria increased by over 66% in Q4 2023 when compared with the previous quarter. 

He also noted that the new reforms have led to an inflow of $1.8 billion into the foreign exchange market last week. 

 

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