Naira Experiences Second Depreciation Against Dollar, Hits N840.53 at Official Market.
Dollar to Naira also crashed at the Black Market.Â
In a concerning trend, Nigeria’s currency, the naira, faced a second round of depreciation against the US dollar on Wednesday, as reported by official data from FMDQ. The figures revealed that the naira closed at N840.53 against the dollar at the end of the trading day, indicating a N9.56 depreciation compared to the previous day’s exchange rate of N830.97.
This marks the second time within the week that the country’s currency has experienced a decline on the official foreign exchange market. The fluctuation raises concerns about the stability of the naira in the face of evolving economic conditions.
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At the Parallel Market, the naira also faced a devaluation, exchanging at N1,150/$1 on Wednesday, up from N1,130/$1 on Tuesday. The parallel market often reflects market sentiments and is closely watched by businesses and individuals for real-time indicators of currency performance.
Despite the currency’s challenges, the country’s foreign exchange turnover saw an increase of 61.86%, reaching $198.21 million. The surge in forex turnover suggests heightened activity in the market, possibly influenced by various economic factors.
The timing of these developments coincides with the absence of a Monetary Policy Committee (MPC) meeting for the second time in two months. Dr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), failed to convene the MPC meeting, raising questions about the central bank’s response to the currency’s fluctuations and broader economic challenges.
The naira has experienced volatility in the foreign exchange market since the introduction of reforms by the CBN in June of this year. The impact of these reforms on the currency’s stability remains a subject of scrutiny, with stakeholders closely monitoring the situation for potential implications on the broader economy.
As the naira navigates through these challenges, the central bank’s response and the evolving economic landscape will play a crucial role in shaping the currency’s trajectory in the coming weeks. The fluctuations underscore the need for a comprehensive and proactive approach to address the dynamics influencing the currency’s performance in the foreign exchange market.
