The intra-day high for the Nigerian naira against the US dollar peaked at N1,582 on Wednesday, coinciding with a notable 56.58% decrease in forex turnover, which fell to $117.87 million.
Both official and black-market exchange rates experienced marginal declines against the dollar.
Despite this, recent improvements in forex turnover are partially credited to the Central Bank of Nigeria’s issuance of a new circular aimed at curbing suspected excessive foreign currency speculation and hoarding by Nigerian banks.
However, challenges persist in the forex market despite CBN’s efforts to enhance forex supply through various policy interventions.
At the close of business, data from the Nigerian Autonomous Foreign Exchange Market revealed a 0.26% depreciation of the local currency, settling at N1503 to a dollar.
This marked an N3.93 loss compared to the previous day’s closing at N1499.07.
In the parallel forex market, the naira depreciated marginally to N1,545/$1, a 1.81% decrease from the previous day’s N1,517. Additionally, the Great British Pound saw a 0.53% depreciation, closing at £1/N1,900, while against the Euro, the naira dropped by 1.23%, closing at N1620/EUR1.
In the cryptocurrency market, where forex is transacted using stablecoins, the naira crossed N1,587.40/$1.
Recent reforms by the CBN, including the removal of caps on international money transfer operations, signal a move towards a market-driven exchange rate mechanism and potentially a free float of the Naira.
The circular also discontinues caps on interbank foreign exchange transactions and lifts restrictions on the sale of interbank proceeds.
