Naira slumps to N1,089.51/$1 at NAFEM

The Naira experienced a significant decline on Tuesday closing at N1,089.51 against the dollar from N922.22 against the dollar the previous day at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

 This represents a notable depreciation of 27.19per cent compared to the previous closing, raising concerns about the currency’s trajectory in the new year. 

Fourth-time Naira crossed the N1,000/$ threshold

 This latest depreciation marks the fourth time the Naira has breached the N1,000/$ threshold, highlighting a persistent trend of weakness. 

The first instance occurred on Friday, December 8th, 2023, when the currency reached a historical low of N1,099.05 per dollar.

This was followed by a brief reprieve before a second depreciation on Thursday, December 28th, 2023, closing at N1,043.09 per dollar while the third time was on Wednesday, January 3rd, 2024, when the local currency closed at N1,035.12 per dollar in official market. 

Despite recent efforts by the Central Bank of Nigeria (CBN) to bolster the foreign exchange market through interventions, the currency’s downward trend persists, prompting concerns about its potential impact on the broader economy. 

This development is likely to exacerbate existing inflationary pressures and further strain household budgets, particularly for those reliant on imported goods.  

The implications for businesses, both large and small, are also significant, with potential increases in production costs and challenges in maintaining profitability.  

The domestic currency depreciated by 27.19per cent to close at N1,089.51 to a dollar at the close of business, data from the NAFEM where forex is officially traded, showed.  

This represents an N232.94 loss or a 27.19 per cent decline in the local currency compared to the N856.57 it closed on Monday.  

The intraday high recorded was N1251/$1, while the intraday low was N720/$1, representing a wide spread of N531/$1.  

According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $97.45 million, representing a 63.34% increase compared to the previous day.  

However, the naira closed flat at the parallel forex market where forex is sold unofficially, the exchange rate, quoted at N1245/$1 same as in the previous day, while peer-to-peer traders quoted around N1239.45/$1.