Naira Slump Persists Despite 46% Rise In Dollar Turnover

The amount of dollars traded on the Investor & Exporter forex window has risen by 46.69 per cent to $123.25m.

On Friday, the turnover of dollars in the official market was $84.02m. This increased to $123.25m on Monday. Despite this, the naira depreciated by 1.96 per cent to N795.41/$ as of the close of trading on Monday after closing trading at N780.14/$ on Friday according to data from FMDQ OTC Securities Exchange. On Monday, trading opened at N780.83/$ before closing at N795.41/$.

However, during trading the naira traded for as high as N1099/$ and as low as N701/$. Meanwhile, on the parallel market, the naira continued its fall, depreciating by 4.55 per cent to N1,150/$ from the N1,100/$ it traded for on Friday.

A Bureau de Change Operator who only gave his name as Awolu said, “I am buying at N1,110/$ but selling at N1,150/$.” Another trader, Kadir, added, “It is N1,150/$ today if you want to sell. If you want to buy it is N1,170/$”.

The naira has continued to depreciate following the Central Bank of Nigeria’s order to allow the free flow of the country’s exchange rate in June on the official Investor & Exporter forex window. Before this move, the naira traded at the official market on the FMDQ at 471.67/$ and at the parallel market at 765/$ in June.

However, according to new information from Economist Intelligence, the naira is set to close 2023 at N810/$ on the official market. It disclosed this in its recently released country report. It stated that after floating the naira in June, the apex bank has since reverted to guiding the exchange rate by limiting access to foreign exchange sales for banks and other dealers that quote prices outside a preferred rate.

The EIU noted that this unsupportive monetary policy would continue to put pressure on the naira. It said, “However, other factors undermining the naira, such as deeply negative short-term real interest rates, require an orthodox monetary policy that the authorities have not demonstrated enough appetite for. We therefore do not expect a currency float to succeed over 2024-28, although it seems likely that the fuel subsidy will end when the Dangote refinery is able to replace imports, from late 2024 onwards.”

Olusola Akintonde/Punch