On August 4, 2024, the naira fell to a six-month low of N1,625.88 per dollar in the official NAFEM market, marking a significant depreciation from the previous day’s rate.
This decline, which represents a 0.89% drop from the day before, reflects ongoing volatility in Nigeria’s foreign exchange market.
The naira’s exchange rate has fluctuated between a high of N1,640/$1 and a low of N1,400/$1, indicating significant instability.
The FX turnover also saw a slight decrease of 1.84%, falling to $205.76 million from $209.61 million the previous day. This drop in turnover is part of a broader trend, with a 25% reduction in total FX turnover from July to August 2024, highlighting liquidity and stability issues in the market. This reduction in turnover underscores the challenges the Central Bank of Nigeria (CBN) faces in managing the naira’s value amid tightening dollar liquidity.
The naira’s depreciation is compounded by recent petrol price hikes, which are expected to worsen inflation and add to economic pressures for businesses and consumers. The CBN is struggling to stabilize the currency amid ongoing demand pressures and insufficient dollar liquidity. The naira, along with other currencies like the Egyptian pound and Ghanaian cedi, has been one of the worst-performing currencies in 2024.