THE naira on Monday, May 13, depreciated against the dollar, falling to N1,515/$ on the parallel market, despite various interventions by the Central Bank of Nigeria (CBN).
The apex bank has rallied efforts to save the naira from decline with its interventions and below official rate sale of dollars to the Bureau de Change Operators (BDCs). However, this has failed to save the naira from further decline.
This decline represents 2.97 per cent (N45/$1) depreciation against the US dollar when compared with the level of N1,470 exchanged on Friday, May 10.
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The fall came despite a marginal increase in Nigeria’s external reserves by 0.4 per cent week-on-week to settle at a four-week high of $32.4 billion as of May 8.
Economy watchers had expected the naira to extend its depreciation against the dollar to this week with a slight drop in the intervention by the Central Bank of Nigeria (CBN).
“We must intensify the export of finished commodities to strengthen the naira. The CBN interventions are not enough, “an economist, Kingsley Obiakor, told The ICIR.
Last week, the foreign exchange (FX) witnessed persistent weakness in the weaker naira due to a shortage of dollars in the market.
At the close of the FX market on Friday, the naira fell flat by 0.45 per cent as the dollar was quoted at N1,466.31, weaker than N1,459.73 closed on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the market summary released by FMDQ Securities Exchange Limited.
The intraday high closed at N1,490 on Friday, weaker than the N1,465 closed on Thursday, May 9.
The intraday low strengthened marginally to N1,322 per dollar as against N1,351 on Thursday.
Dollar supplied by willing buyers and willing sellers increased by 34.84 per cent to $113.78 million on Friday from $84.38 million recorded on Thursday.
The naira on Friday fell to a month-low of 1,470 against the dollar, on the parallel market also known as the black market, following the dollar shortage and the activities of speculators. The local currency depreciated to as low as N1,510 as of March 21, 2024, at the parallel market.
The FX market activity level waned as average turnover at NAFEM declined by 31.0 per cent week-on-week to close at $894.3 million as of May 9, according to a report by Afrinvest Securities Limited.
“We expect the naira to extend its decline barring any interventions,” analysts at Afrinvest said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.