Naira Nears 1,000 to Dollar Threshold, Traders Predict Further Decline
Written by Deborah Oyinloye on April 17, 2024
The Nigerian naira continues its upward trend against the US dollar, reaching N1,136/$ at the official market and N1,050/$ at the parallel market by the close of Monday’s trading session. Traders are optimistic about the dollar’s further depreciation, foreseeing it falling below the N1,000 mark before the week concludes.
According to data from the FMDQ Exchange, the naira saw a significant 6.1% appreciation from Friday’s rate, climbing from N1,205/$ to N1,136/$ on Monday. Despite a slight drop in daily turnover to $251.60 million, down from $281.34 million on Friday, the intra-day high improved to N1,227 per dollar.
This surge follows a series of foreign exchange directives by the Central Bank of Nigeria (CBN) aimed at stabilizing the currency. The CBN recently announced the successful resolution of all valid foreign exchange backlogs, addressing claims totalling $7 billion.
Additionally, total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) surged by 41.7% to $3.75 billion, the highest level since March 2019. The CBN also revised the exchange rate for Bureau De Change operators to N1,101 per dollar and plans to sell $15.88 million to eligible operators.
Analysts at Afrinvest anticipate further naira strengthening as the CBN intensifies liquidity-boosting efforts. However, currency traders at the Wuse Zone 4 market express concerns about diminishing profits due to declining naira rates. Traders report buying between N950 and N980 and selling between N1,010 and N1,020.
One trader lamented the slow business and decreasing demand, with rates nearing below N1,000 per dollar. Some traders even resort to buying at N900 and selling at N940 per dollar.
Goldman Sachs Group recently highlighted the naira as the top-performing currency globally in April, projecting further gains due to effective policy management by the CBN, including significant interest rate hikes.
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Author: Deborah Oyinloye
With an interest in media, Deborah aims to impart the lives of people positively.
