The naira, the indigenous currency of Nigeria, declined by N2.83 at the Investors and Exporters foreign exchange (FX) market after a sharp increase in demand for foreign currencies (FCY).
According to information from the Central Bank of Nigeria (CBN) website, Nigeria’s foreign reserve, which stands at $37.52 billion, is considered to be reasonably solid as a cushion for maintaining the local currency.
However, it has turned out that the apex bank’s market involvement is insufficient to maintain the local currency’s strength. The CBN Governor, Godwin Emefiele, has emphasized that there will be no devaluation of the local currency.
However, as residents increasingly use the dollar for both personal and economic purposes, the Naira has lost ground on global currency markets. FX losses are disclosed by businesses in their financial statements.
Due to capital control regulations, the majority of multinationals still struggle to repatriate money from abroad. However, as measured by gross domestic product, this has decreased the entry of foreign currency into Africa’s greatest economy.
In spite of the CBN’s assurances that participants with legitimate dollar demands would have access to as much, leaving the local economy has also proven to be challenging. Nigerian banks already prohibit the majority of debit card transactions, including internet shopping.
The Nigerian naira was sold to importers and manufacturers at the official window for N444.50, a demand-driven depreciation of 0.64% from N441.67 on Wednesday.
According to market statistics, the open indicative rate on Thursday was N441.25 to the dollar. Before it closed at N444.50, the exchange rate for the day’s trade reached a high of N450.06 to the dollar.
In the course of the day’s trade, the Naira dropped as low as N425 to the dollar. On Thursday, transactions at the official Investors and Exporters window totaled 100.90 million dollars.