Nigerian Naira to Dollar Falls to Record Low at I&E Window, Despite Recent Parallel Market Appreciation.
Lagos, Nigeria – The Nigerian naira hit a historic low, trading at N993.83 against the US dollar on the investors’ and exporters’ (I&E) platform, marking a significant 25.81 percent depreciation from the previous rate of N789.94.
The I&E window serves as Nigeria’s official foreign exchange (FX) trading platform, and the recent fall in the naira’s value has raised concerns among market observers and economists.
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Data from FMDQ Securities Exchange, the authority overseeing FX trading in Nigeria, revealed that the I&E window experienced a daily trading range of N475 to N998 against the dollar on Monday.
The trading session commenced at N794.70 and concluded at N993.83, with the total daily FX market turnover amounting to $88.31 million.
In contrast, the parallel market has seen the naira maintain its recent gains, with the local currency trading at N1,150 against the US dollar.
This juxtaposition between the official I&E rate and the parallel market’s rate highlights the ongoing challenges in Nigeria’s foreign exchange system.
The situation has prompted the federal government to consider implementing new FX regulations, with a focus on curbing illicit currency trading.
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One of the key objectives is to address a significant backlog of dollar demand, estimated at approximately $6.7 billion. Additionally, the government aims to bolster the naira forward market and establish transparent rules governing the official FX market.
Wale Edun, Nigeria’s Minister of Finance and Coordinating Minister of the Economy, announced on October 23, 2023, that the country anticipates $10 billion in foreign currency inflows. This influx of foreign exchange is expected to alleviate liquidity challenges within the foreign exchange market and help stabilize the naira’s value.
The volatility in the foreign exchange market remains a central concern for Nigeria’s economic stability, and the government’s efforts to address the situation will be closely monitored by both local and international investors.
The exchange rate dynamics will continue to be a critical factor influencing business decisions and investment prospects in the country.
