Naira Falls Again Against US Dollar in Official, Black Markets as US Bank Predicts New Exchange Rate
- The value of the Nigerian currency, the Naira, depreciated once again against the United States dollar
- New data shows that the Naira weakened across all FX markets and currently exchanges above N1,600
- An Economist, Amamchukwu Okafor, explained to Legit.ng solutions to stop the free fall of Naira
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigerian Naira continued its poor performance against the US Dollar in the official and black market.
Data from FMDQ securities shows that at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the official market, the Naira closed at N1,627.40/$ on Friday, March 8, 2024.
Source: Getty Images
This represents 1.6% or N25.23 depreciation compared to N1,602.17/$1 exchanged in the previous trading section.
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Nigerian currency suffered these losses during the session despite an improvement in dollar supply to the market.
Data shows that on the week's final trading day at NAFEM, FX transactions totalling $269.35 million were conducted, marking a significant increase of 63.5% or $104.59 million compared to the previous day's total of $164.76 million.
Also, CBN data shows that in the official market, its value weakened against the Pound Sterling on Friday by N13.31 to close at N2,036.13/£1 compared to N2,022.82/£1 on the previous day.
While against the Euro, it declined by N8.87 to trade at N1,740.38/€1, in contrast to the preceding session's N1,731.51/€1.
Naira to dollar unofficial exchange rate
At the parallel market on Friday, the Nigerian Naira lost N3 against the Dollar to sell for N1,623/$1 versus Thursday's rate of N1,620/$1, showing convergence between the official and black market rates.
Expert speaks
Reacting to the current exchange rate, Amamchukwu Okafor, Senior Consultant at Native Insight, spoke on the current state of the Naira, explaining that the Naira's fall is largely due to Nigeria's weak forex reserves.
He said:
"The current FX problem is one of insatiable demand for FX against a severely weak FX reserve and FX revenue streams.
"The CBN policies have been targeted mainly at increasing the supply of FX, but it's not nearly enough to ease the insatiable demand for FX.
"Economic agents are simply buying up and hoarding FX as much as they can find it.
"Policies must be targeted at moderating speculative FX demand while simultaneously increasing supply. One way is to aggressively combat black market activities on foreign exchange."
US bank predicts new Naira to Dollar exchange rate in 2024
Meanwhile, a US-based investment bank, Goldman Sachs, has predicted a new exchange rate for the Naira against the Dollar
Goldman Sachs said the Naira is expected to rebound and close the year at N1,200 per Dollar at the official market
In a new report, the investment bank explained things that influenced its prediction.
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Source: Legit.ng
