The Nigerian naira exchange rate to the US dollar witnessed significant volatility on Monday with the official Investor and Exporters window closing at N795.28/$1.
The official exchange rate showed a positive trend as it rose from N803.9 per dollar on Friday while the parallel market rate stood at N820 per U.S. Dollar, weaker than the average rate of N815/$1 recorded last Friday.
The monetary policy committee (MPC) of the Central Bank of Nigeria is set to convene on Tuesday and Wednesday for the first time since President Bola Ahmed Tinubu floated foreign exchange, suspended CBN Governor Godwin Emefiele and removed subsidies.
The committee is expected to focus on addressing rising inflation and the impact of monetary policy tools on the economy, with specific attention given to the demand pressure affecting the exchange rate.
The key highlight of today’s meeting will likely be the anticipated adjustment of the monetary policy rate. Analysts from Nairametrics predict a potential increase to at least 19% or, at the very least, 18.75%, as the committee seeks to address the prevailing economic challenges.
Breaking down the data, the I&E FX window experienced volatility during the trading house of Monday with the exchange rate opening at N782.79 to a Dolla and reaching as high as N832.
Moreover, the turnover at the I&E window witnessed a decrease of 26.33%, amounting to $34.55 million, in comparison to the turnover of $46.90 million traded on the previous Friday. Over the course of the last eleven trading days, the total turnover amounted to $849.04 million, marking a decline from the turnover value of $1.59 billion recorded in the same period in June 2023.
In the parallel market, the naira depreciated further against the US dollar, reaching a record high of N820/$1, adding to the pressure experienced by the black market due to increasing demand for dollars.
The crypto P2P exchange market also saw a slight decline in the value of the naira against the US dollar, with an average exchange rate of N818.65/$1.