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Naira Relapses, Drops to N1,234/$ at Official Market

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The Naira has declined against the US dollar after dropping to N1,234/$ at the official foreign exchange market on Monday, according to data obtained from the Financial Markets Dealers Quotations (FMDQ) securities exchange. This latest decline saw the naira fall by 5.47 percent from the N1,169.99/$1 it recorded on Friday.

Meanwhile, Nigeria’s foreign exchange reserves continued its free fall for the past month. According to the latest data released by the Central Bank of Nigeria, the country’s external reserves hit a fresh low of $32.1 billion on April 18, 2024. This marks a decrease of $2.35 billion within 31 days, dropping from $34.45 billion on March 18, 2024.

However, during the International Monetary Fund/World Bank Spring Meetings, the Central Bank governor, Mr. Yemi Cardoso, explained that the bank’s intervention in the exchange market would be limited unless extraordinary circumstances emerged. He emphasized that the recent slight adjustment in reserves was not connected to protecting the naira.

The national currency experienced a significant decline in the forex market in the weeks leading up to the crackdown on crypto giant Binance, reaching as high as N1,950 in mid-February.

Many observers and experts attributed its previous misfortune to the alleged manipulation of the market by Binance. Nonetheless, some stakeholders have blamed the new crypto exchange platforms BYBIT and BITGET for the latest slip.

Analysts indicated that the naira underwent a depreciation over six months from July 2023 to January 2024, particularly evident in the black market following the disbursement of funds by the FAAC to federal, state, and local government authorities.

The breakdown of the forex transaction revealed that the intra-day high depreciated, concluding at N1,295 per dollar. Similarly, the intra-day low decreased to N1,051/$. Meanwhile, the overall daily turnover experienced a slight decline to $110.17 million on Monday.

At the parallel market, currency traders sold the dollar between the rate of N1,250 and N1,270 from N1,154 recorded last Friday.

Some Bureau de Change operators have attributed the recent dollar rise to market dynamics. They expressed uncertainty about whether the rate would further increase or decrease before the week concludes.

The naira, which had been on a remarkable surge since late March, positioning it as the top-performing currency globally, experienced a setback on Sunday marking its first decline in several weeks on the parallel market.

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