Wednesday, June 5, 2024, saw the naira reaches low of N1,488.60/$1 in three weeks on the official market.
Closing at N1,488.60/$1, the naira experienced a 0.78% drop from the previous day on the NAFEM window, according to the latest data from the FMDQ Securities Exchange.
Volatile FX market
The naira’s latest slump, although marginal, affirms the high volatility of the local currency. Over the past three weeks, the naira has experienced a roller-coaster trajectory.
On May 27, the naira saw its highest strength within the last three weeks, trading at N 1,173.88/$, after a 14.09% appreciation.
However, the gains were short-lived as the currency quickly depreciated again. The sharp contrast highlights the currency’s volatility in the face of economic pressures.
Aside from the dip in value, the foreign exchange (FX) turnover rate today was reported at $205.43 million, a 13.32% decrease compared to the previous day.
This drop in the FX turnover rate, coupled with the naira’s depreciation, may signal a potential lack of confidence among traders and investors in the currency’s stability.
What you should know about how naira reaches low of N1,488.60/$1 in Just three weeks
- As Nigeria grapples with various economic challenges, the naira’s depreciation poses further complications for policymakers and businesses alike.
- The currency’s instability can lead to increased costs for imported goods and services, which in turn could drive inflation higher.
- However, the Central Bank of Nigeria (CBN) and the government have been making efforts to boost forex liquidity in the market and the value of naira.
- The apex bank has maintained a tight monetary policy stance to manage inflation and stabilize the naira.