Naira Depreciates 2.4% Against US Dollar Despite Surge in Market Supply

The Naira recorded a 2.4 percent depreciation against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday to close at N1,678.87 per Dollar despite a significant surge in supply volume in the official market.

At the previous session on Thursday, the Naira closed down at N1,639.50/$1, indicating a decrease of N39.37 at the approved market.

A turnover of $1.403 billion was on record at the market, according to data from the FMDQ Securities Exchange Limited. This indicated a $1.158 billion or 473.1 percent jump versus the $244.96 million quoted recently.

The surge in supply indicates that the Central Bank of Nigeria (CBN) issued guidelines to banks on implementing the free foreign exchange deposit window which gives banks the liberty to trade with the forex made available by scheme participants.

According to the document released this week titled “Guidelines On Implementation Of The Foreign Currency Disclosure, Deposit, Repatriation, And Investment Scheme, 2024,” the apex banks said commercial, merchant, and non-interest banks may trade with any deposited ITFC (Internationally Tradable Foreign Currencies) not immediately invested by a participant, provided that the funds would be made available to the participant when needed.

In a different trend, the domestic currency witnessed a flat outcome against the British currency and the Euro in the week’s closing session.

On the Pound Sterling, the local currency closed at N2,160.43/£1 and N1,796.61/€1 on the Euro.

In the parallel market, the local currency strengthened against the US Dollar, the Euro, and the Canadian Dollar but weakened against the Pound Sterling.

The Naira gained N12.89 against the American currency to close at N1,708.59 to the US Dollar compared to N1,721.48/$1 it closed on Thursday.

Against the Euro, the Naira quoted at N1,845.11/€1 versus the previous day’s rate of N1,848.28/€1 as it added N3.17 and against the Canadian Dollar, it appreciated by N7.77 to close at N1,224.09 per Canadian Dollar, compared to N1,231.86 per CAD in the recent session.

On the English currency, there was fall of 72 Kobo to wrap the final  session at N2,216.09/£1 from N2,215.37/£1.