Naira Plunges to All-Time Low of N980 Amid Surging Demand for US Dollars

In a remarkable turn of events, the Nigerian Naira experienced a historic low, sinking to an alarming N980 per dollar due to the escalating demand for dollars within the parallel market, often referred to as the black market.

The depreciation of the Naira can be attributed to a surge in demand for dollars, primarily driven by individuals traveling for various purposes, including business, education, medical treatment, and tourism.

Meanwhile, at the official FX market known as the Investors’ and Exporters’ (I&E) forex window, the Naira witnessed a 0.34 percent decline, with the dollar quoted at N776.60 on Tuesday, compared to N773.98/$1 on Monday, as reported by data from FMDQ.

Year-to-date, the Naira has seen a staggering depreciation of 68.46 percent, equivalent to N315.60, plummeting from the N461/$1 exchange rate recorded at the beginning of the year.

In the exchange market, willing buyers and sellers maintained their positions with bids ranging from a high of N799.90/$1 to a low of N720.00/$1. The daily turnover in the foreign exchange market amounted to $71.01 million on Tuesday.

Meanwhile, in the money market, the Nigerian treasury bills secondary market reported a slight negative trend on Tuesday, with the average yield across the curve inching up by 1 basis point to 7.17 percent, compared to the previous day’s 7.16 percent, according to a report by FSDH Research.

The average yields across short-term and medium-term maturities remained stable at 3.05 percent and 6.16 percent, respectively, while the long-term maturities saw an expansion of 9 basis points. Notably, the treasury bill maturing on July 11, 2024, experienced selling pressure, resulting in a 9 basis point increase in its yield.

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