After Gaining N200 Against The Dollar, Naira Depreciates Again Despite Help From Saudi Arabia

After Gaining N200 Against The Dollar, Naira Depreciates Again Despite Help From Saudi Arabia

  • The Nigerian currency has fallen against the US dollar after days of rallying in the official and parallel markets
  • The naira traded at N795.41 to the dollar in the official NAFEM market and also dropped in the black market
  • Reports said there was about 46.69% increase in dollar supply at NAFEM, the official Forex market in Nigeria

Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.

The dollar supplied to the Autonomous Foreign Exchange Market (NAFEM), the official Forex market in Nigeria, increased by 46.69% but could not help the naira against the US greenback.

Official data from FMDQ shows that the daily foreign exchange market turnover rose by 46.69% to $123.25 million on Monday, November 13, 2023, from $84.02 million recorded on Friday, November 10, 2023.

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Naira, dollar, Tinubu
The naira depreciated against the dollar again. Credit: Bloomberg/Contributor
Source: Getty Images

Dollar supply rises in NAFEM

Despite the improved dollar liquidity, the naira fell by 1.96% as data showed that the dollar was quoted at N798.41 on Monday, November 13, 2023, against N780.14 quoted on Friday, November 10, 2023.

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BusinessDay reports that buyers and sellers quoted the dollar at a higher rate of N1,099 and a lower rate of N701 per dollar in the official window.

The market resumed on Monday, November 13, 2023, with the naira losing against the dollar in the parallel market, following renewed pressure after appreciating for two days.

The Nigerian currency firmed against the dollar on Thursday, November 9, and Friday, November 10, 2023, from N1,140 on Wednesday, November 8, 2023.

Expert predicts further depreciation

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A banker with one of the tier 2 banks in Nigeria, Lawrence Ifedi, said that the demand for the dollar remains high ahead of Christmas shopping.

He said:

“We have noticed that the naira is still under pressure as Nigerians intensify shopping ahead of Christmas. Between August and September, importers and investors piled pressure on the forex market as they plan to bring in products from overseas.”

He stated that the much-talked-about $7 billion released by the Nigerian government to pay FX backlogs has dissipated, hence the reviewed pressure on the naira.

“Overall, I think the naira will steady above N800 as we head into the Christmas period. It means that Nigerians should expect it to reflect on the cost of goods and services.”

FG secures commitment from Saudi Arabia

The depreciation of the naira comes after President Bola Tinubu secured a commitment from the Kingdom of Saudi Arabia to help the Central Bank of Nigeria with Forex supplies.

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The country pledged a bilateral engagement between President Tinubu and Crown Prince Mohammed Bin Salman.

The Minister of Information and National Orientation, Mohammed Idris, disclosed this in a press statement.

The statement said that the Saudi Prince commended the reforms of the current CBN management and promised to support Nigeria in other areas.

Per the statement, the Kingdom will support the CBN’s FX reforms and help make available enough forex exchange to fix Nigeria’s forex scarcity.

Idris said that Prince Bin Salman commended the economic policies of President Tinubu and expressed the commitment of the Saudi government to supporting the reforms and helping Nigeria to benefit from the reforms.

Naira bounces back, rises by over N200 against US dollar in 24hrs as Tinubu’s govt gets support reported that Nigerian currency improved against the US Dollar on Friday, November 10, 2023, after falling to a record low at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

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Data from FMDQ securities showed that the Naira closed at N780.14/$1 during the week's last trading session at the official market.

This represents 21.7% or N216.61 appreciation compared to the record low of N996.75/$1 in the preceding session of Thursday, November 9, 2023.


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