The intra-day high reached a peak of N1,582 against the US dollar on Wednesday, accompanied by a notable decline in forex turnover, which fell by 56.58% to $117.87 million.
Both official and black-market exchange rates saw a marginal decrease in the value of the Nigerian naira against the dollar.
Despite this, forex turnover has shown signs of improvement in recent periods, attributed partly to the Central Bank of Nigeria’s (CBN) issuance of a new circular aimed at curbing suspected instances of excessive foreign currency speculation and hoarding by Nigerian banks.
Nevertheless, despite the efforts of the CBN to enhance forex supply through various policy interventions, challenges persist in the forex market.
At the close of business, based on data from the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency experienced a depreciation of 0.26%, settling at N1503 to a dollar.
This represents an N3.93 loss or a 0.26% decrease in the local currency compared to the N1499.07 it closed at on the previous day.
The intraday high recorded was N1,582/$1, while the intraday low was N922.38/$1, representing a wide spread of N659.62/$1.
According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $117.87 million, representing a 56.58% decrease compared to the previous day.
READ ALSO: Naira exchange rate worsens at black market, slides to N1517/$1
Similarly, the naira depreciated marginally at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,545/$1, a decrease of 1.81% against N1,517 it closed the previous day,
The Great British Pound (GBP) depreciated marginally by 0.53% to close at £1/N1,900 as against £1/N1,895 the previous day while Naira also dropped against the Euro by 1.23% to close at N1620/EUR1 against NI600 / EUR1 reported the previous day.
In the cryptocurrency market where forex is sold using stablecoins, the Naira also crossed N1,587.40/$1.
Recently the Central Bank of Nigeria (CBN) announced significant reforms in the foreign exchange market, signaling a stride towards a market-driven exchange rate mechanism, potentially paving the way for a free float of the Naira.
READ ALSO: Forex crisis: CBN edges towards free float of Naira
This follows a recent circular removing caps on international money transfer operations. The CBN’s recent circular outlines pivotal changes, including the discontinuation of a cap on the spread of interbank foreign exchange transactions and the lifting of restrictions on the sale of interbank proceeds.
“A key objective of the ongoing foreign exchange market reforms by the Central Bank of Nigeria is to promote a market-based price discovery system,” the circular states, marking a shift towards a more liberalized forex regime.
“Under the new guidelines, forex transactions will operate on a “Willing Buyer and Willing Seller” basis, ensuring more flexibility in the exchange rates determined by market forces. The CBN emphasizes the importance of transparency and ethical standards, mandating that “Authorized Dealers are to continue to conduct their foreign exchange transactions…and to strictly adhere to high ethical standards.”