The Nigerian naira faced a further decline against the US dollar on Wednesday, November 22, 2023, witnessing a 1.14% depreciation at both the official market and the parallel market.
At the official NAFEM (Nigeria Autonomous Foreign Exchange Market) where forex is officially traded, the naira closed at N840.53 to a dollar, representing a N9.56 loss or a 1.14% decrease compared to the previous day’s closing rate of N830.97.
The intraday high recorded was N1135/$1, while the intraday low was N743.43/$1, indicating a substantial spread of N391.57/$1.
Forex turnover at the official market surged to $198.21 million at the close of trading, reflecting a significant 61.86% increase compared to the previous day.
In the parallel forex market, where forex is sold unofficially, the naira depreciated by 0.87%, quoting at N1150/$1. Peer-to-peer traders quoted around N1149.50/$1.
Olatunde Amolegbe, the former President and Chairman governing council of the Chartered Institute of Stockbrokers, and Managing Director of Arthur Steven Asset Management Limited, highlighted the importance of market and participants’ confidence for exchange rate stability. He emphasized that efforts to clear FX commitment backlogs and reduce currency speculation through monetary policy tools may positively impact market confidence but could take time to manifest.
Bismarck Rewane, Managing Director/CEO of Financial Derivatives Company Limited, predicted ongoing volatility for the naira due to lingering forex supply concerns. The scarcity of dollars is expected to fuel speculative buying, with an increasing number of market participants opting for long positions on the dollar while shorting the naira.
