Currencies
Naira continues decline at official window, rebounds by 2.14% at parallel market
The Nigerian naira continued its downward trend against the US dollar at the official exchange window, closing at N1,309.88 on Thursday, March 25th.
This represents N1.36 depreciation from the previous day’s rate of N1,308.52.
The currency has been on a six-day losing streak in the official market, the longest since its devaluation in January, with a marginal 0.1% drop against the dollar on Thursday, contributing to a 2.39% loss for the month.
Since June, the naira has depreciated over 60% following two devaluations intended to make the currency more market-driven to attract foreign investment.
However, in the parallel market, the naira saw a 2.14% appreciation, recovering from a six-day loss to trade at N1,400 to the dollar on Friday, March 26th, after a significant dip to N1,450 the previous day.
Despite the Central Bank of Nigeria’s (CBN) distribution of $15.83 million to 1,583 Bureau De Change operators on March 22nd, the naira has broken through critical support levels at N1,200/$ and N1,300/$, indicating a reduced influence of the CBN in the foreign exchange market, as reported by Nairametrics.
FMDQ Securities reported a substantial 61.02% increase in daily turnover to $318.08 million on Thursday, March 26th, marking a recovery from a cumulative loss of $206.9 million since the start of the month.
This turnover suggests a dynamic and responsive foreign exchange market despite the naira’s recent volatility.
More Insights
- During the last trading session, the naira’s intra-day peak and trough were N1,435 and N1,100 against the dollar, yielding a modest differential of N335.
- In the parallel market, the naira appreciated to N1,400 per dollar, improving from the prior rate of N1,450.
- Against the British pound, the naira remained steady at N1,650.
- However, it depreciated by 2.33% against the euro, ending the day at N1,500, down from the previous session’s N1,465.
- The forex market saw a substantial uptick in activity, with trading volumes surging by 61.02% to reach $318.08 million, surpassing the $197.54 million recorded by NAFEM earlier.
- The CBN reported a marginal reserve increase of 0.026%, with the total reserve value climbing to $32.118 billion on March 24th, up from $32.113 billion on March 23rd.
