On the official Foreign Exchange window for Investors and Exporters, the naira ended trading on Wednesday at N1035.12/$.
From the N988.46/$ it closed trading on Tuesday, this represents a 4.72% decrease, per statistics from the FMDQ Securities Exchange.
The national currency has declined in the first two trading days of 2024, and Wednesday’s closing above N1,000/$ is the third time it has done so since the Central Bank of Nigeria lifted its rate cap.
The I&E window showed that the naira hit an all-time low of N1,099.05/$ on December 8. Following a modest rebound, it dropped to N1043.09/$ on Thursday, December 28, 2023.
The naira started trading at N932.67/$ on Wednesday. Before closing at N1035.12/$, it reached an intraday high of N1,224/$ and a low of N700/$. The day’s total FX turnover was $85.68 million.
Despite the Federal Government’s recent receipt of a $2.25 billion foreign exchange support facility from the African Import-Export Bank, the naira has had a poor start to 2024.
The first tranche of the bank’s $3.3 billion facility, according to Wale Edun, Minister of Finance and Coordinating Minister of Finance, is intended to address the economy’s FX shortages.
This loan is a component of a facility that was announced as secured in August 2023 by Nigerian National Petroleum Company Limited.
The naira is one of the currencies with the lowest performance. Bloomberg predicted that 2024 might not be any better than 2023, which was one of the currency’s worst years ever.
The World Bank reported in its December Nigeria Development Update that the naira had lost 31% of its value on the parallel market and 41% on the official market compared to the US dollar. It stated that more nairas are needed to attain stability in the official market.
It stated, “Further monetary policy tightening is expected to help underpin the value of the naira. However, there is also a need to increase FX supply in the market. Facilitating FX flows, especially from all exports, through the NAFEM can help provide additional volumes in the official window that can help provide stability.
“In addition, clarity on the CBN’s net reserve position, and on the CBN’s continued progress in clearing the FX backlog, would also strengthen market confidence.”