Naira Plunges as Foreign Currency Demand Rises

Naira Plunges as Foreign Currency Demand Rises

The equilibrium position in the foreign exchange market shifted against the Nigerian local currency on Thursday as demand pressures greeted the investors’ and exporters’ FX market space.

The Naira value of foreign exchange (FX) transacted at the Investors and Exporters window printed at N231 million today, according to a market report.

The naira on Thursday was exchanged at N446 to the United States (US) dollar, representing a depreciation of 0.04 per cent in 24 hours, compared with the N445.83 it exchanged on Wednesday.

FX market data shows that the open indicative rate closed at N445 to the dollar on Thursday. Traders said an exchange rate of N452 to the dollar was the highest rate recorded within the day’s trading before it settled at N446.

The naira sold for as low as 439.98 to the dollar within the day’s trading while a total of N231.20 million was traded at the official Investors and Exporters window on Thursday.

Ahead of yuletide, market participants’ demand for foreign currencies for various imports has been large, far above the level of dollar inflow into the market. Naira has reclaimed value when it printed at N446 before. READ: Naira Trades at N446, Exchange Rates Gap Reduces

For the most part of the first half of 2022, the exchange rate had settled around N415. The FX market situation started dwindling as the 2023 election programme gained momentum.

For the rest of the year, analysts said the exchange rate might worsen further due to year-end demand plus election spending. Naira Plunges as Foreign Currency Demand Rises