The naira weakened against the U.S. dollar on October 11, 2024, closing at N1,641.27 in the official Investor and Exporter (I&E) window, despite crude oil futures remaining above $79 per barrel.
This shift highlights changes in Nigeria’s foreign exchange landscape, with the naira depreciating by 1.15% from the previous day’s rate of N1,622.57.
Meanwhile, market turnover in the I&E window experienced a significant surge, rising to $616.73 million—a 323% jump from the $145.56 million traded the previous day.
Key Data Points:
Closing Exchange Rate: On October 11, 2024, the naira closed at N1,641.27 per dollar, reflecting a 1.15% decline from the previous day’s N1,622.57.
Intra-Day Highs and Lows: During the trading session, the naira fluctuated, peaking at N1,675.00 and dipping to a low of N1,591.00, before settling at N1,641.27.
Market Turnover: Market volume traded in the I&E window surged to $616.73 million, a significant increase from the prior day’s $145.56 million. For perspective, the total turnover in September reached $3.3 billion.
Parallel Market Rates: In the parallel market, the naira opened at N1,620.39 per dollar. It experienced slight variations, with highs of N1,620.44 and lows of N1,620.39, before closing at N1,620.41.
Market Trends:
Throughout 2024, Nigeria’s exchange rate has been under sustained pressure, leading to a substantial depreciation of the naira.
The currency has lost over 70% of its value since January, starting the year at N907.11/USD and exceeding N1,500/USD by October.
In the early months of 2024, the naira experienced a steep drop, hitting a record low of N1,616.53 per dollar in February. March brought a brief recovery as the currency stabilized around N1,303 per dollar.
However, this rebound was short-lived, with the naira falling below N1,100 in early April and reaching N1,002 by the middle of the month.
After this temporary stabilization, the downward trend resumed, with the naira declining further to N1,668.97 by the end of September.
What to Know
- The World Bank has ranked Nigeria among the top ten countries most affected by food inflation. In its September report, it listed Nigeria as the fifth hardest-hit country globally and the third in Africa, after Malawi and Liberia.
- In a separate development, the Nigerian government has allowed petroleum marketers to obtain petrol directly from the Dangote refinery, bypassing the Nigerian National Petroleum Company Limited (NNPC).
- Finance Minister Wale Edun, who also chairs the Naira-crude sale implementation committee, provided an update on the start of crude purchases and sales in naira in a statement released on Friday.
What to Expect:
- The naira is anticipated to strengthen, especially if supported by positive economic developments.
- Favorable policy shifts can boost overall sentiment toward the naira, counteracting negative influences such as Nigeria’s food inflation ranking.
- Additionally, opportunities like a weakening dollar or beneficial macroeconomic shifts could provide the momentum needed for a stronger naira.