The exchange rate between the naira and the dollar fell to N1,484.75 on Thursday, May 30, 2024, marking the second consecutive day of decline.
Earlier in the week, the naira had shown unexpected strength, appreciating to N1,173.88 on Tuesday, its best performance in over two months.
This surprising gain was first indicated on Monday, when the naira closed at N1,339.33 against the US dollar, sparking hopes of a sustained recovery ahead of the May 29th celebration.
However, the local currency’s rally was short-lived. By Thursday, the naira had slipped back above the N1,400 mark, closing at N1,484.75 as the gains of the earlier days dissipated.
Market Update
The official exchange rate closed at N1,484.75/$1 on Thursday, representing a 10.45% depreciation in one day.
The intra-day high and low recorded a price of N1,520/$1 and N1,100/$1, respectively, indicating a disparity of N420/$1. This widening exchange rate disparity between closing rates, intra-day highs, and lows has continued in recent days. The NAFEM rate closed at N1,263.88 on May 29, 2024.
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Meanwhile, the daily turnover was $235.41 million, representing a 30% drop from the previous day’s turnover of $336.54 million.
In total, the market has experienced a turnover of about $1.08 billion this week compared to $720.5 million in the same period last week. On the parallel market, where the exchange rate is sold unofficially, the rate traded between N1,460 and N1,470 to the dollar, in line with the official rate.
What Residents Should Know
Earlier in the week, the naira surged to N1,173.88/$1 on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window on Tuesday, marking an increase of 14.09% from the previous day’s rate.
This is the highest one-day increase since January 2024 and comes amidst a significant surge in foreign exchange (FX) turnover, which increased by 81.59% to $328.32 million.
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The naira has experienced consecutive double-digit appreciation on the official market. Sources indicate that the Central Bank of Nigeria (CBN) has been selling more dollars on the official market in anticipation of a $1.3 billion non-deliverable forward (NDF) maturing on Wednesday, May 29, 2024. However, with the NDF closed out, the exchange rate appears to be returning to the normal range of between N1,400 and N1,500 to the dollar.
Nigeria’s external reserves stood at $32.68 billion as of May 28, 2024, yet to recover to above the $33 billion
