The exchange rate between the naira and the US dollar appreciated to N1,580.46 at the official Investor and Exporter (I&E) window on Monday, September 9, 2024.
This represents a 0.81% gain when compared to the N1,619.95 recorded in the previous trading session on Friday.
This is according to data from FMDQ, which tracks official currency transactions.
The exchange rate has remained moderately volatile, flickering over and under the ₦1,600 range over recent days.
Key Data Points:
Closing Exchange Rate: The naira closed at N1,580.46 on Monday, recovering from the previous close of N1,619.95 recorded on Friday.
Intra-day Highs and Lows: During the day’s trading, the naira hit an intra-day high of N1,660/$1 and a low of N1,570/$1, reflecting significant variability in official rates.
Market Turnover: Market turnover stood at $197.37 million, up from $185.79 million on Friday.
Total turnover in August reached $3.25 billion, a notable decrease from $4.34 billion in July 2024, highlighting a decline of $1.08 billion.
Parallel Market Rates:
In the parallel market, where the exchange rate is traded unofficially, rates ranged between N1,606.78 and N1,650.00, remaining slightly below the official window rate.
Trends in the Market:
Since mid-July, the naira has fluctuated within the N1,600 range, with the currency hitting a high of N1,660 before closing at N1,619 on Friday.
The naira has depreciated by approximately 86% year-to-date, largely due to inflation and increased market demand for dollars.
Meanwhile, Nigeria’s external reserves were reported at $34.66 billion as of July 2024.
What you should know
The Central Bank of Nigeria (CBN) has announced plans to sell $20,000 to eligible Bureau De Change (BDC) operators at a rate of N1,580/$1 to address market demand.
The CBN, through a statement signed by Dr. W.J. Kanya, Director of the Trade & Exchange Department, directed that BDCs sell to end users at no more than 1% above the purchase rate of N1,580/$1.
This measure aims to ease the pressure on the naira and curb further depreciation by increasing the availability of dollars in the market.
What to expect
- The exchange rate will continue to be volatile due to recent developments in the global economy. Oil prices fell over the last few days before retreating on Monday.
- A rise in global oil supply has become a major heading for traders who for the first time since 2011 have placed the most bearish bets for crude oil prices.
- Brent Crude fell to $71.65 per barrel despite plans by OPEC to cut crude oil supplies.
- If crude oil prices continue to fall, then this could have a negative impact on Nigeria’s dollar earnings and could portend a headwind for the exchange rate.