Victor EzejaAfter two days of respite, the value of the naira on Friday, 2nd August 2024, depreciated to N1617.08/$ at the official market.
This reflects 3.0 per cent depreciation when compared to N1,570/$ recorded at the close of trading on Thursday, 1 August 2024, according to the Nigerian Autonomous Foreign Exchange Market (NAFEM) data published on the FMDQ Securities and Exchange platform.
Join our WhatsApp ChannelAt the close of trading on Monday, 29 July, the local currency witnessed depreciation, exchanging N1,611.40 for one dollar at the official market. The exchange rate further jumped to N1,621.12/$ on Tuesday, 30 July. The naira recorded appreciation on Wednesday, 31 July, (N1,608.73/$) and Thursday, 1 August (N1570/$) before falling again to N1,617.08/$ on Friday.
The NAFEM data showed that there was an intraday day high of N1,635.00/$1 and a low of N1,550.00/$1 on Friday.
FX turnover Decline
Prime Business Africa observes that while the naira continued to tumble in the foreign exchange market, the Fx turnover also witnessed a significant decline within the week. From $179.34 million on Monday, it dropped to $166.34 million on Tuesday. After rising to $270.81 million (62.80 per cent increase) on Wednesday, it crashed by 47.45 per cent to $142.32 million on Thursday, despite naira appreciation against the green back on that day. On Friday, it further fell by 7.57 per cent to $131.55 million.
CBN Interventions
The Central Bank of Nigeria (CBN) has adopted a raft of measures to stabilise the value of the naira in the foreign exchange market. In an attempt to increase supply of forex in the market, the CBN has intervened by selling dollars to authorised dealers to meet demands, especially at the retail end of the market.
Last week, the CBN sold a total amount of $148 million to authorised dealers. The foreign exchange was sold to 29 Authorized Dealer banks at exchange rates ranging between N1,470.00$1 and N1,510.00/$1. It was the third tranche of sales to authorised FX dealers in July as the CBN tried to boost liquidity in the FX market.
Also, the apex had announced in a statement signed by Dr Omolara Omotunde Duke, Director, Financial Markets Department, that on 18 and 19 July 2024, it sold $106.5 million to 29 authorised dealer banks at exchange rates ranging from N1,498/$1 to N1,530.00/$1 and bought $9.5 million from four authorised dealer banks at rates between N1,510/$1 and N1,550/$1.
Two weeks ago, the CBN had also announced that it sold $122.67 million to 46 authorized dealers.
Despite these interventions by the CBN in the foreign exchange market, the naira continues to face severe demand pressure, causing persistent depreciation.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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