On Tuesday, the naira faced renewed pressure in the official foreign exchange market, depreciating by 0.71% against the dollar. The dollar was quoted at N1,500.79, down from N1,490.20 on Monday in the Nigerian Autonomous Foreign Exchange Market (NAFEM), as reported by the FMDQ Securities Exchange Limited. Dollar supply by willing buyers and sellers dropped by 10.03% to $136.75 million from $152.00 million the previous day.
The intraday high closed at N1,507 per dollar on Tuesday, slightly weaker than N1,505 on Monday, and the intraday low depreciated to N1,436 from N1,411. The naira also weakened on the parallel market, trading at N1,505, representing a 0.99% depreciation from N1,490 quoted nearly a month ago. Traders attributed this weakness to increased dollar demand ahead of the summer holiday and by importers needing dollars for raw materials.
Abiodun Keripe, Managing Director of Afrinvest Research and Consulting, suggested it is too early to attribute the naira’s depreciation to the upcoming summer holiday. He noted an expected $2.5 billion inflow could bolster external reserves and strengthen the naira. Keripe emphasized that Nigeria’s exchange rate is determined by market liquidity under the willing buyer, willing seller system.
Source: Business Day