Naira depreciates further against US dollar

Naira depreciated against the US dollar to close at N412/$1, representing a N1 differential depreciation compared to N411/$1 recorded at the close of trading on Tuesday, 24th August 2021.

On the other hand, the naira remained flat at the parallel market as it closed at N521/$1 on Wednesday, 25th August 2021, the same as recorded in the previous day. It is worth noting that the rate had depreciated from N515 to a dollar recorded as of Friday, 20th August 2021.

The opening indicative rate closed at N411.74/$1, representing a depreciation compared to N411.74/$1 recorded on Tuesday.

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An exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it settled at N412/$1, while it sold for as low as N400/$1 during intra-day trading.

Meanwhile, forex turnover at the Investors and Exporters (I&E) window increased significantly by 132.6% on Wednesday, 25th August 2021.

According to data from FMDQ, forex turnover increased from $77.46 million recorded on Tuesday to $180.19 million on Wednesday, 25th August 2021.

Meanwhile Nigeria’s foreign reserve dipped $31.29 million on Tuesday, 24th August 2021 to close at $33.39 billion, thereby cancelling out its month-to-date gain initially recorded. The reserves have now depleted $3.34 million in the month of August 2021.

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The latest decline cancelled out the positive movement in the month of August as the month-to-date movement in the external reserves is currently at a $3.34 million deficit, having recorded daily declines for 10 consecutive days.

Its year-to-date change shows a $1.97 billion loss compared to $35.37 billion recorded as of 31st December 2021.

While recent reports have suggested that Nigeria’s foreign reserve position could grow as high as $40 billion by the end of September 2021, the recent decline in the external reserve could be attributed to the decline recorded in the global crude oil market in recent weeks.