Naira fell further against the US dollar from N696/$1 recorded on Wednesday to N698/$1 on Thursday, representing a 0.29% depreciation as FX traders attributed the falling currency to sustained scarcity of dollars and increased demand.
The exchange rate had recovered from the shocking downturn recorded in late July when naira dipped as low as N718 to a dollar. The rate averaged around N672/$1 in the first week of August and maintained stability for most parts of the month.
However, surging demand for foreign exchange and liquidity crunch has driven the rate upward and depreciated the local currency at the unofficial market.
Similarly, at the cryptocurrency peer-to-peer exchange, naira fell to N696/$1 in the early hours of Thursday, from N692.9/$1 recorded in the previous trading session.
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The exchange rate at the official Investors and Exporters window also depreciated in the last trading session, falling marginally by 0.08% to close at N431/$1 from N430.67/$1 recorded on Tuesday, 23rd August 2022.
Meanwhile, a total of $131.3 million in FX value was traded on Wednesday, 24th August 2022 which is 25.3% lower than the $175.67 million that exchanged hands in the previous session.
According to a report, the temporary strengthening of the Naira in early August and the subsequent weakening can be attributed to intermittent supply fluctuations.
The article also noted that despite the increased FX inflow at the official market which saw a sharp recovery in the exchange rate, none of the fundamental Macro indicators has shifted in the favour of the local currency.