Naira Depreciates Against Dollar Amid Decline in FX Supply

The naira experienced a depreciation against the dollar in the foreign exchange market following the June 12 Democracy Day celebration, with FX turnover transactions plummeting to $92.68 million.

According to data from FMDQ, the naira saw a slight decline, trading at N1476.24 to the dollar on Thursday, down from N1473.66 on Tuesday. Similarly, in the parallel market, the naira depreciated to N1490 against the dollar on Thursday, compared to N1470 traded on Tuesday.

This depreciation occurs as the turnover of foreign exchange transactions significantly dropped from $385.91 million on Tuesday to $92.68 million on Thursday. This represents a loss of N2.58 against the dollar in just two days.

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The naira had shown signs of strengthening earlier, appreciating for two consecutive sessions against the dollar before this latest decline. Despite the Central Bank of Nigeria’s policy interventions, the foreign exchange market has experienced considerable fluctuations since mid-April 2024.

The recent depreciation highlights the ongoing challenges in Nigeria’s foreign exchange market, exacerbated by reduced FX supply and market volatility.