Naira Plummets to Record Low of N980/$ Amidst Soaring Dollar Demand – In a startling development, the Naira plummeted to its all-time low, reaching N980 against the dollar in the black market on Wednesday. This drastic drop is largely attributed to the surging demand for dollars by Nigerians traveling for various reasons, including business, education, medical treatments, and tourism.
This trend isn’t limited to just the parallel or “black” market. Official figures from the Investors’ and Exporters’ (I&E) forex window, which represents Nigeria’s official foreign exchange market, revealed that the Naira dipped by 0.34 percent. As of Tuesday, the dollar was quoted at N776.60, a noticeable fall from N773.98/$1 recorded the previous day, according to data sourced from the FMDQ.
A broader look at the currency’s performance this year paints a grim picture. Since the start of the year, the Naira has seen a depreciation of a staggering 68.46 percent, moving from an initial N461/$1 to the current N776.60/$1.
Market dynamics on Tuesday saw willing buyers and sellers quoting bids between a high of N799.90/$1 and a low of N720.00. Furthermore, the daily turnover for the foreign exchange market capped at a considerable $71.01 million.
On a related note, the Nigerian treasury bills secondary market didn’t fare well either. Reports from FSDH Research indicate a minor negative shift on Tuesday. The average yield across the curve witnessed a marginal rise, increasing to 7.17 percent from the 7.16 percent observed a day earlier. Particularly, long-term maturities saw a yield expansion of 9 basis points. In contrast, short-term and medium-term maturities remained stable at 3.05 percent and 6.16 percent, respectively. The treasury bill set for July 11, 2024, experienced notable selling pressure, further indicating the prevailing financial climate.
The current state of Nigeria’s currency and treasury markets underlines the urgent need for interventions and sustainable financial strategies to stabilize and boost the nation’s economic outlook.