The Nigerian currency fell to a low of 860 naira to the dollar on Wednesday in the foreign exchange (FX) market, also known as the black market. The devaluation of the naira follows strong demand from people and suppliers who want to travel for summer holidays and business, a trader said. Foreign exchange trading opened on Wednesday as the naira dropped to eight hundred and thirty naira. This represents a 3.48% (N30) loss in the value of the naira in less than 12 hours. In the Investors and Exporters (I&E) exchange window, the naira also decreased by 6.83, and the dollar was quoted at 793.70 naira on Wednesday against 742.93 naira/$1 quoted on Tuesday, according to FMDQ data. Buyers and sellers support highs such as N853.00 and N699.50, low prices are seen in the FX market. Daily trading turnover rose by 152.35% to $87.19 million on Wednesday from $34.55 million recorded on Tuesday.
On June 14, 2024, the CBN closed all parts of the forex market in the I&E window, the Nigerian forex market, and restored voluntary buyers and sellers. As a result, the official exchange rate changed from 463.38 naira/$ to 793.70 naira, the current rate. Despite the CBN floating on the naira, a huge supply gap still exists in the forex market, FBNQuest analysts said. "Therefore, we expect a significant change in the naira exchange rate, at least in the near term. Also, we do not see an increase in income for foreign investors as they can sit on the sidelines until they can bring back a large part of the foreign exchange reserves, estimated at about $3 billion. On this basis, we see a year-end rate of N825/USD, "said the analysts. Analysts say that the flexible exchange rate has transformed the foreign exchange market, uniting the fragmented market segments, removing trade barriers and closing the gap between the official rate and the equivalent market rate. These activities are aimed at attracting investment and promoting economic growth. "We are confident that the policy changes adopted by the investors will make the country a positive development and lay the foundation for sustainable growth," the analysts said.
One of the traders who gave his name as Bala said, “There’s dollars in the market, and we have buyers too”. "Therefore, we expect a significant change in the naira exchange rate, at least in the near term. Also, we do not see an increase in income for foreign investors as they can sit on the sidelines until they can bring back a large part of the foreign exchange reserves, estimated at about $3 billion. On this basis, we see a year-end rate of N825/USD, "said the analysts. Analysts say that the flexible exchange rate has transformed the foreign exchange market, uniting the fragmented market segments, removing trade barriers and closing the gap between the official rate and the equivalent market rate. These activities are aimed at attracting investment and promoting economic growth. "We are confident that the policy changes adopted by the investors will make the country a positive development and lay the foundation for sustainable growth," the analysts said.
