The Nigerian naira appreciated against the US dollar, closing at N1,576.10 in the official Investor and Exporter (I&E) window on Thursday, September 26, 2024.
This represents a 5.48% gain from the previous day’s closing rate of N1,667.52, highlighting the naira’s renewed strength amid ongoing market volatility.
Market turnover also experienced a surge, increasing by 232.5% as it jumped from $100.47 million on Wednesday to $334.05 million on Thursday.
Key Data Points
Closing Exchange Rate: The naira’s trading session on September 26 concluded with a rate of N1,576.10 per dollar, marking a significant rebound of 5.48% from the N1,667.42 recorded the day before.
Intra-day Highs and Lows: Throughout the trading day, the naira experienced fluctuations, trading as high as N1,699.00 per dollar and dipping to a low of N1,567.00 before settling at the closing rate of N1,576.10.
Market Turnover: The turnover in the I&E window surged to $334.05 million, an increase from the $100.47 million reported just a day prior. For context, total turnover for August is at $3.3 billion, which represents a decrease from July’s $4.34 billion.
Parallel Market Rates: In the parallel market, the naira opened at N1,650.41 against the dollar. It fluctuated, reaching a high of N1,660.38 and a low of N1,646.58, before ultimately closing at N1,660.38.
Market Trends
The naira has been grappling with challenges since it fell below the N1,600 threshold in July, amid market volatility.
Since then, the currency has oscillated between N1,500 and N1,600. Year to date, the naira has depreciated by approximately 75%, driven largely by soaring inflation and a demand for foreign currency.
However, there has been a slight improvement in Nigeria’s external reserves, which increased from $36.305 billion at the end of August to $36.730 billion by mid-September.
What You Should Know
Recently, the federal government announced that ExxonMobil plans to invest $10 billion in Nigeria’s offshore oil operations.
Additionally, the Central Bank of Nigeria (CBN) has commenced the sale of an additional $20,000 to each Bureau de Change (BDC) operator at an exchange rate of N1,590 per dollar.
This initiative is part of a broader strategy to alleviate the demand pressure on the naira. According to CBN guidelines, BDC operators are permitted to sell this foreign exchange to eligible end-users at a margin not exceeding 1% above the purchase rate.
What to Expect
- The news regarding ExxonMobil’s substantial investment is positive and paints a good picture of the economic environment.
- Such developments may enhance overall economic sentiment and influence major currency players to adopt a more favorable outlook on the naira in the long term.
- Furthermore, the CBN’s initiative to distribute dollars to BDCs aims to stabilize the naira by increasing the availability of foreign exchange.
- This move is expected to help alleviate pressures in the parallel market, fostering a more balanced currency environment.