Naira Depreciates To N902/$1 As Forex Turnover Drops 17.36% To $145.89m

In a tumultuous trading session on Friday, January 19th, 2024, the Nigerian naira faced a 0.04% depreciation, closing at N902.45 to a dollar in the official market, as reported by the Nigeria Autonomous Foreign Exchange Market (NAFEM).

The day witnessed extreme volatility, with the intraday high reaching N1200/$1 and the low touching N467/$1, revealing a spread of N733/$1.

Forex turnover at the close of trading recorded a 17.36% decline, plummeting to $145.89 million, raising concerns among market participants and experts.

READ ALSO: Naira Gains At N902/$1 In Official Market As Forex Turnover Soars

In parallel markets, the naira experienced a 1.85% decrease, quoting at N1350/$1, reflecting a worrisome trend in unofficial forex trading.

Financial experts, including Mr. Olatunde Amolegbe, emphasized the pivotal role of market and participant confidence in stabilizing exchange rates.

Amolegbe suggested that addressing structural issues, such as security, infrastructure, and encouraging local production, is crucial for long-term stability. Meanwhile, Bismarck Rewane, the Managing Director/CEO of Financial Derivatives Company Limited, predicted continued naira volatility due to lingering forex supply concerns, leading to speculative dollar buying.

“The decision to clear FX commitment backs may boost market confidence, but the impact is likely in the medium term,” commented Amolegbe, underscoring the complexity of the situation. As the dollar scarcity persists, Rewane cautioned that speculative buying could persist, exacerbating the challenge for market participants navigating the unpredictable forex landscape.