Nigeria Naira Falls to N1,582.09 After Four Days of Gains as External Reserves Drop
The Nigerian naira experienced its first decline in four days on August 14, 2024, depreciating by 0.70% at the official foreign exchange market. This reversal comes amid a drop in the country’s external reserves and reduced dollar supply.
According to data from FMDQ, the naira closed at N1,582.09 to the dollar at the official market, down from N1,570.99 the previous day. This depreciation occurred despite the Central Bank of Nigeria’s (CBN) recent efforts to stabilize the currency through retail dollar sales to banks.
Conversely, the parallel market saw a slight appreciation of the naira, with the currency gaining 2.47% to close at N1,598 per dollar, compared to N1,600 the day before. However, dollar supply to the market decreased by 18.26%, falling from $246.44 million to $201.43 million.
Nigeria’s external reserves also saw a decline, dropping by 0.68% from $36.872 billion on August 7 to $36.620 billion on August 12, 2024. This decrease follows a previous rise to $37.88 billion in mid-July, indicating challenges in maintaining recent stability.
CBN Governor Olayemi Cardoso emphasized the importance of monitoring forex market developments to maintain stability and attract capital flows. Meanwhile, Monetary Policy Committee member Bala Moh’d Bello stressed the need for continued exchange rate stability to manage inflation and import prices.
The naira’s performance reflects ongoing challenges in Nigeria’s forex sector, despite recent efforts to stabilize the market. While some MPC members noted improved foreign exchange inflows and relative market stability, others highlighted the naira’s recent depreciation against the dollar as a concern.
As the CBN continues its interventions, market observers are closely watching for signs of sustained stability in the naira’s value and the country’s external reserves.
