Naira Takes a Hit Against the US Dollar as Foreign Exchange Supply Plummets

The Naira witnessed a decline against the US dollar on Wednesday, attributed to a significant drop in foreign exchange supply by 56.58%, totaling $117.87 million. According to data from FMDQ, the Naira depreciated to N1503.38 per US dollar from N1,499.07 on Tuesday, marking a N3.93 loss or a 0.26% decrease.

The Parallel Market mirrored this trend, with the Naira slipping to N1,545 per Dollar on Wednesday from N1,517 the day before. Interestingly, this depreciation followed a marginal appreciation of the Naira against the dollar in the official FX market on Tuesday.

Despite these fluctuations, Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, offered assurance regarding exchange rate stability during an interaction with the Senate Joint Committee on Banking, Insurance, and Financial Institutions in Abuja last Friday. It’s worth noting that since the introduction of the ‘Financial Markets Price Transparency and Market Notice of a Revision to the FMDQ FX Market Rate Pricing Methodology’ and other reforms on January 29th by the CBN, the country’s exchange rate has hovered between N1,400 and over N1,500 per US dollar.