Naira falls to new record low at parallel market

The naira hit a new record low, depreciating against the dollar at the parallel market, as it closed at N528/$1 on Wednesday, 1st September 2021, representing a N2 drop when compared to N526/$1 recorded on the previous trading day.

The naira fell against the dollar across the forex markets with demand pressure, despite the dollar supply of $486.31 million at the official market, representing a 570.8% increase in forex liquidity.

The local currency has been hitting new lows at the black market since the CBN’s decision to channel demand from the unofficial market.

READ ALSO: Naira falls to record low at black market as forex supply drops

The naira depreciated against the US dollar on Wednesday, 1st September 2021 to close at N411.50 to a dollar, representing a 0.1% loss when compared to N411.08/$1 recorded on the previous trading day.

The opening indicative rate closed at N411.58/$1 on Wednesday, September 1, as against N412.04/$1 recorded on Monday, representing a 46 kobo appreciation.

An exchange rate of N413 to a dollar was the highest rate recorded during intra-day trading before it settled at N411.50/$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 rose significantly by 570.8% on Wednesday, 1st September 2021.

According to data from FMDQ, forex turnover increased from $72.50 million recorded on Tuesday to $486.31 million on Wednesday, 1st September 2021.

Nigeria’s foreign reserve rose by $85 million as it recorded its fifth increase in over 2 weeks to close at $34.018 billion on Tuesday, 31th August 2021, compared to $33.933 billion recorded as of the previous day. The latest increase represents a 0.25% boost in the country’s foreign reserve.

In the same vein, the reserve level has also gained $615 million month-to-date compared to $33.403 billion recorded as of the beginning of the month.

However, its year-to-date change shows a $1.535 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.