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Official exchange rate closes week at N1,665.50/$1 amidst demand pressure, forex decline
The Naira experienced a decline against the US Dollar in the official market, concluding the week at N1,665.50/$1, amid sustained demand pressures that continued to exert downward pressure on the currency’s value.
This decrease in the exchange rate coincided with a notable downturn in forex turnover, which plummeted by 21% to $151.93 million.
Additionally, the situation was exacerbated by a significant surge in inflation, as reported by the National Bureau of Statistics (NBS) for January 2024.
The inflation rate rose to 29.90%, marking a substantial increase from the 28.92% recorded in the previous month.
This data reflects a noteworthy uptick in the headline inflation rate for January 2024, with 0.98% points increase compared to December 2023 figures.
According to data from the NAFEM (Nigeria Autonomous Foreign Exchange Market), where forex is officially traded, the domestic currency depreciated by 5.66% at the end of the week, closing at N1,665.50 to a dollar at the close of business.Top of Form
This represents an N94.19 loss or a 2.58% decrease in the local currency compared to the N1,571.31 closed on Thursday.
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The intraday high rose at the peak of N1805/$1, while the intraday low was N1301/$1, representing a wide spread of N504/$1.
According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $151.93 million, representing a 21% decrease compared to the previous day.
However, the naira appreciated at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,750/$1, an increase of 7.43% against N1,880 it closed the previous day,
Meanwhile, the Great British Pound (GBP) remained flat at £1/N2260, same as was recorded the previous day.
Additionally, the Naira against the Euro traded flat, closing at N1960/EUR1 compared to N1960/EUR1 also reported the previous day.
In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,708.40/$1.
Market analysts attributed the current state of Naira to a consistent uptick in the demand for dollars that has persisted.