Naira hits new low at N820/$, as forex supply gap persists

Naira falls to N1,135/$ at parallel market

At the backdrop of sustained supply gap in Nigeria’s foreign exchange (forex) market, the local currency, Naira, has hit a new low at the weekend, trading N803.9 to a dollar in the Investors & Exporters (I&E) window which is the official forex market and N822/$ in the parallel market.

Findings indicated a 6.6 per cent decline in volume of dollars traded in the I&E window as dealers said they were disappointed that the increase in supply they expected last week did not materialize.

A week-on-week trend in the parallel market shows a 5.5 percent depreciation to N822/$ as against N779/$ closing rate previous week.

In the I&E window, the local currency depreciated 3.9 percent W-o-W to N803.9/$ from N776.9/$ the previous Friday.

Currency monitor shows that after the initial massive depreciation on June 14th, 2023 when the Central Bank of Nigeria, CBN, introduced reforms in the market, exchange rate had remained volatile with daily fluctuations until the record low was hit last weekend.

The reform majorly eliminated multiple exchange rates and reintroduced the ‘Willing Buyer Willing Seller’ market model in the I&E window.

Since the new measures were introduced, the Naira has depreciated cumulatively in the I&E window and parallel market by 70 per cent (N321.23) and 7.0 per cent (N58) respectively.

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