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Naira falls to new record low at parallel market

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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 ALSONaira 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.

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