The official exchange rate of the Nigerian Naira improved from N803.9 per dollar, but at N820/$1, the parallel market rate is weaker than the average of N815/$1 recorded last Friday, according to Nairametrics survey.
The Monetary Policy Committee (MPC) of the Central Bank of Nigeria is set to meet next week to discuss the economy, its first meeting since the revision to the forex market was introduced and without CBN Governor Godwin Emefiele. Analysts expect the MPC to address rising inflation and the demand pressure affecting the exchange rate.
The Interbank Foreign Exchange (I&E) FX window saw high volatility, with the exchange rate ranging from N782.79/$1 to N832/$1. The naira averaged N768.38/$1 for the first eleven trading days of the month, higher than the average rate of N524.21/$1 in the previous month.
In the parallel market, the naira depreciated to N820/$1, marking a record high in the black-market exchange rate against the naira, driven by increasing demand for dollars. The crypto P2P exchange market also showed a slight decline in the naira’s value against the US dollar.
Opinion: The volatility in the Nigerian Naira’s exchange rate highlights the challenges the country is facing in managing its forex market. The upcoming MPC meeting will be closely watched by investors and market participants to gauge the central bank’s response to rising inflation and the demand pressure on the exchange rate. As external reserves continue to fluctuate, it becomes crucial for the authorities to implement effective measures to stabilize the currency and boost investor confidence.