- The Naira hit a new low at N1,043.09 against the dollar, a significant depreciation from the previous day’s rate
- A 38.81% increase in dollar supply, reaching $127.93 million, was attributed to active FX auction participation at NAFEM
The naira witnessed a significant depreciation, reaching a new low at N1,043.09 against the dollar in the official foreign exchange market on Thursday. This marked a stark contrast from the N872.59/$ rate recorded just a day earlier at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Dealers reported that this rate surpassed the N885.88/$ quoted last Friday before the Christmas holidays. According to data from the Financial Markets Dealers’ Quotations (FMDQ), there was a notable 38.81 percent increase in dollar supply, soaring from $92.16 million on Friday to $127.93 million on Wednesday.
The surge in dollar supply was attributed to active participation in the FX auction at NAFEM by both willing buyers and sellers. On the spot trading, the dollar was quoted at N1,235.65, showcasing strength compared to the $1,248 quoted on Friday. Conversely, for the lower spot rate, the dollar traded for N740, slightly weaker than N700 observed on Friday.
In a broader context, the Naira has been designated as one of the world’s worst-performing currencies in 2023. This revelation aligns with Bloomberg’s recent report, forecasting that the Naira is on track for its most challenging year since the return to democracy in 1999. Analysts are pessimistic, predicting a further depreciation in 2024.
These unsettling developments in the forex market raise concerns about the economic landscape, warranting close attention as Nigeria navigates through these challenging times.