On Thursday, the naira closed at N996.75/$ on the Investor & Exporter FX window, despite recent actions by the Central Bank of Nigeria to fortify the foreign exchange market.
It concluded trading on Wednesday at N874.71/$, a 13.95 percent decrease. Based to data from FMDQ OTC Securities Exchange, the naira has depreciated by 27.75% since it opened the week at N780.23/$.
The naira has steadily declined in both the official and parallel markets since strengthening against the dollar last week, following news that the apex bank was clearing some of its backlog.
The World Bank has classified the naira as one of the worst performing African currencies as of now, having lost around 40% of its value.
The value of the currency has also decreased on the black market, where, according to Bureaux De Change operators who communicated with the media, it was close to N1,140/$ on Thursday as opposed to N950 on Friday. This indicates a 20% reduction.
A merchant identified only as Kadri remarked, “Dollar is N1,100 if you want to sell. It is N1,140 if you want to buy.”
Aminu Gwadabe, the president of the Association of Bureaux De Change Operators of Nigeria, stated earlier this week that the reason the dollar was strengthening against the naira was because those who had purchased it at a higher price were holding onto it.
According to him, “Speculators are always looking at elements of sustainability. Once they sense that it (the injection) is not continuous, they begin to react. They begin to react. It is the reaction of the market we are witnessing. Also, there is resistance. There are people that bought at a higher price that this does not favour. People are not willing to take further losses.”
The presidency has said that measures to fortify the local currency are being planned, citing concerns over the decline in value.
At an event, Dr. Tope Fasua, Special Advisor to the President on Economic Matters, spoke on behalf of Vice President Kashim Shettima. “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the central bank is rolling out the policies and the government that I serve, led by the President, will shock some of them.”
