The official Investor and Exporter forex window witnessed a decline in naira value on Thursday, as the US Dollar supply decreased by 46.77 per cent.
According to data from the FMDQ Securities Exchange, this decline amounted to 13.78 per cent from the previous day’s closing rate of N840.53 against the US Dollar. Additionally, the market saw a decreased volume of dollars traded, with the turnover falling from $198.21m on Wednesday to $105.50m.
The day reportedly started with the naira trading at N800.90 against the US Dollar, but it experienced fluctuations throughout the day, reaching a high of N1136/$ and a low of N615/$. Eventually, it closed trading at N956.33/$, Naija News learnt.
The Central Bank of Nigeria (CBN) has made several efforts to address the backlog of foreign exchange forward contracts, yet the instability of the naira continues.
Recent data from the World Bank reveals that the naira is one of the worst-performing currencies globally, having lost approximately 40 per cent of its value since June.
As highlighted by the Economic Intelligence Unit of the Economist Group, the CBN’s inability to meet the demand for foreign exchange orders is anticipated to exert a persistent strain on the naira.
It stated, “In Nigeria, an unsupportive monetary policy implies that the naira will remain under pressure, while the central bank lacks the firepower to adequately supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors unnerved. High inflation and a continued spread with the parallel market will leave the exchange rate regime unstable and result in periodic devaluations.”