Naira Falls over Low Foreign Currency Supply
The Nigerian local currency, the naira, fell over low foreign currency supply in the investors’ and exporters’ foreign exchange (FX) market following the successful conduct of 2023 presidential election.
With a higher demand for the United States (US) seen in the market by manufacturers seeking to import allowable goods and services, the Naira was exchanged at N461.40 to the greenback at the official market.
The rate represented a depreciation by 0.01 per cent, compared with the N461.35 for which it exchanged to the dollar on Wednesday. The open indicative rate closed at N461.50 to the dollar on Thursday.
An exchange rate of N462 to the dollar was the highest rate recorded within the day’s trading before it settled at N461.40.
The Naira sold for as low as N446 to the dollar within the day’s trading. A total of 96.44 million dollars was traded at the official Investors and Exporters window.
In their separate financial statement, dwindling local currency impacted profitability of Nigeria’s large corporates with higher exposures to the greenback. A number of results indicate that FX losses remain a major issue for manufacturers that rely on importation of materials from offshore.
Companies in fast-moving consumer goods were most impacted, according to audited statements filed with the regulators. Due to unfavourable exchange rates, MarketForces Africa noted that these companies’ FX losses run in billions of naira per annum.
In the parallel market, the Nigerian currency declined to N762 amidst an expectation that Africa’s largest economy means of exchange will be devalued in 2023. #Naira Falls over Low Foreign Currency Supply
