The official Investor and Exporter forex window witnessed a significant downturn in the naira, closing the week at N927.19/$, marking a 16.64% decrease from the previous week’s closing rate of N794.89/$ (November 24, 2023).
Data from the FMDQ Securities Exchange revealed a notable improvement in dollar turnover, soaring from $75.82 million to $110.14 million during the review period.
On Friday, the naira’s trading day commenced at N815.00/$, reaching a high of N1160/$ and a low of N701/$ before ultimately concluding at N927.19/$.
The persistent depreciation of the naira remains evident despite the Central Bank of Nigeria’s efforts to address a backlog of foreign exchange forward contracts.
CBN Governor Olayemi Cardoso acknowledged the challenges, attributing the currency’s instability to fiscal deficits and rising public debt, putting pressure on external reserves.
Speaking at the Chartered Institute of Bankers of Nigeria 58th Annual Bankers’ Dinner and Grand Finale of the Institute’s 60th Anniversary,
Cardoso emphasized the need for clear and transparent rules in both domestic and foreign currency markets to achieve price stability and exchange rate stabilization. He outlined plans for new foreign exchange guidelines and legislation, pledging extensive consultations with banks and FX market operators before implementing any new requirements.
Despite the Central Bank’s efforts, the Economic Intelligence Unit, the research division of the Economist Group, expressed skepticism about the CBN’s ability to clear the backlog of foreign exchange orders.
In a recent report, it noted that an unsupportive monetary policy in Nigeria could keep the naira under pressure, leaving foreign investors uneasy and potentially resulting in periodic devaluations, given the challenges of high inflation and discrepancies with the parallel market.
