The naira closed at N864.29/$ on the official Investors and Exporters window, up 27.16 percent on Monday.
The Punch reported that this was due to the fact that last Friday’s closing trading saw a massive 86.83 percent increase in daily dollar turnover, from $70.90 million to $132.46 million.
According to data from the FMDQ Securities Exchange, the naira’s increase represents a gain of N234.76 from the all-time low of N1099.05/$ it closed trading at last Friday.
Trading began on Monday at N867/$ and went through a high of N1185.10/$ and a low of N720/$. When the dollar’s daily turnover reached $132.46 million, it finally settled at N864.29/$.
The nation’s foreign exchange reserves have decreased by roughly $1.6 billion to $32.97 billion since the central bank decided to unify rates. The free fall of the naira has been attributed to this decrease in foreign exchange reserves.
Nigeria does not have enough foreign exchange reserves to support its exchange rate unification policy, according to a recent assessment by the Economist Intelligence Unit.
According to its Africa Outlook report, “The central bank of Nigeria lacks the strength to sufficiently supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors uneasy.
In addition, an unsupportive monetary policy implies that the naira will remain under pressure.” The exchange rate regime will become unstable due to high inflation and the parallel market’s continued expansion, which will cause periodic devaluations.”
The governor of the CBN, Olayemi Cardoso, recently spoke about Nigeria’s efforts to stabilize its exchange rates. In an attempt to rescue the market, he said the bank planned to release new FX guidelines.
He declared: “Unambiguous, open, and consistent regulations guiding market activities are critical to guaranteeing the appropriate operation of both domestic and foreign exchange markets.
Prior to the implementation of any new requirements, banks and FX market operators will be consulted extensively during the development of new foreign exchange guidelines and legislation.
