The naira experienced a further decline against the United States dollar on Thursday, reaching N1,309/$ in the official market and N1,420/$ in the parallel market.
This latest development, indicating a depreciation of N90 or 6.8%, follows heightened demand for the dollar in the foreign exchange market.
Currency traders at the Wuse Zone 4 market reported buying the greenback at N1,340 and selling it at N1,420, yielding a profit margin of N80.
Malam Yahu Abubakar, speaking via telephone, attributed the naira’s depreciation to increased demand for the dollar, despite efforts by the Central Bank of Nigeria (CBN) to address the situation.
Meanwhile, Abubakar Taura expressed caution in trading, citing concerns that the CBN might implement drastic measures to stabilize the dollar, prompting traders to operate with vigilance and capitalize on profit margins.
With the current exchange rate, the naira has depreciated by 26.2% in two weeks compared to N1,125/$ quoted on April 12, 2023, in the parallel market.
On Monday, the CBN allocated $15.83 million to 1,583 Bureau De Change (BDC) operators to enhance liquidity in the unofficial market. The allocation, at a rate of N1,021/$, aims to stabilize the foreign exchange market and improve access to foreign currency for eligible end users.
In an official communication to BDCs, the CBN directed eligible operators to initiate payments to specified CBN Naira Deposit Account Numbers, effective from Monday, April 22, 2024. Upon confirmation of payment and submission of necessary documentation, the CBN will disburse foreign exchange at respective CBN branches.
In the official market, the naira depreciated to N1,309.88 against the dollar by the end of Thursday’s trading, representing a 0.10% drop from the previous rate of N1,308.52 recorded on Wednesday.
Forex trading volumes surged by 61%, reaching $318.08 million, exceeding the $197.54 million recorded at the Nigerian Autonomous Foreign Exchange Market on Wednesday.
Over the weekend, CBN Governor Yemi Cardoso declared the naira as the best-performing currency globally as of April 2024, attributing this achievement to foreign exchange market reforms and positive sentiment from leading international investment institutions.
However, the future stability of the naira remains uncertain, and stakeholders await further strategies from the apex bank to address ongoing challenges in the foreign exchange market.