The Naira witnessed a decline against the US Dollar in the official market, closing the week at N1,537.96/$1, amid persistent demand pressures undermining the currency’s value.
This depreciation coincided with a significant 74% downturn in forex turnover, amounting to $84.10 million.
Both official and black-market exchange rates saw the Nigerian Naira devalue against the dollar, compounded by a substantial surge in inflation reported by the National Bureau of Statistics for January 2024.
The inflation rate rose to 29.90%, a notable increase from the 28.92% recorded in the previous month, indicating a significant uptick in the headline inflation rate.
These developments persist despite the Central Bank of Nigeria’s implementation of various policies aimed at enhancing the supply of foreign exchange.
One recent policy by the CBN was the directive preventing international oil companies operating in Nigeria from immediately remitting 100% of their forex proceeds to their parent companies abroad.
The domestic currency depreciated by 2.58%, closing at N1,537.96 to a dollar at the end of the week. Forex turnover at the close of trading decreased by 74% to $84.10 million.
In the parallel forex market, the exchange rate was quoted at N1,590/$1, a 1.57% decrease. The Great British Pound closed at £1/N1,930, down 1.04%, while against the Euro, the Naira dropped by 1.21% to close at N1650/EUR1.
In the cryptocurrency market, where forex is transacted using stablecoins, the Naira settled at 1,645.60/$1. Analysts attribute the current state of the Naira to a consistent uptick in the demand for dollars.
The CBN’s new guidelines restrict IOCs from repatriating only 50% of their proceeds immediately, with the other 50% to be repatriated 90 days from the day of inflow.
