Emmanuel Ochayi
Nigeria’s local currency, the naira on Wednesday, 10 January 2024, recorded a marginal gain against the US dollar as trading closed at N1082.32/$ in the official exchange window.
The value of the naira experienced a sharp decline on Tuesday, losing 27.19 percent from its Monday closing value.
The official exchange rate climbed from N856.57/$ on Monday to N1089.51/$ on Tuesday, marking the second-lowest closure in the official FX window.
It, however, appreciated marginally by 0.66 per cent to close at N1082.32 on Wednesday.
This local currency’s value continues to decline despite the Central Bank of Nigeria’s recent move to clear a $2 billion backlog in the FX market.
The Central Bank’s Acting Director of Corporate Communications, Hakama Sidi Alia, stated, “These payments signify the CBN’s ongoing efforts to settle all remaining valid forward transactions, to alleviate the current pressure on the country’s exchange rate.”
Despite renewed efforts to boost liquidity, experts like Dr. Ayo Teriba and Prof. Adeola Adenikinju cite inadequate foreign exchange supply as the key factor behind the naira’s volatility.
READ ALSO: Naira Depreciation Deepens, Exchanges N1,089.51/$1 At Official Market
Teriba emphasized the need for government transparency to attract investors, while Adenikinju predicted more stability in 2024, contingent on factors like local refinery operations and increased oil production.
Financial Derivatives Company’s outlook for 2024, however, paints a challenging picture, suggesting the naira may face pressures, reaching N1,350/$ before a possible rebound in Q2.
The fate of the naira remains uncertain as economic dynamics and government actions continue to influence its trajectory.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
