The exchange rate between the naira and the dollar fell to a six-week low on Monday, closing at N1,490.2/$1, just N10 shy of the significant N1,500/$1 mark. According to official data from the FMDQ, where currencies are traded officially, the exchange rate had remained stable throughout June, oscillating between N1,470 and N1,480/$1. The recent decline towards N1,500 has raised concerns among currency watchers, as surpassing this psychological ceiling could signal a new wave of depreciation.
What the Data is Saying
According to close-of-day data from the FMDQ, the exchange rate closed at N1,490.2/$1 in the official market on June 24, 2024, marking the lowest level since May 17, 2024, when it closed at N1,497.33/$1.
– Total forex turnover for the day was $152 million, bringing the cumulative forex traded month-to-date to around $2.54 billion. This is a decrease from $3.3 billion at the same time in May.
– The intra-day high showed the global reserve currency exchanged for as high as N1,505, while it sold for as low as N1,411 on the day. The intra-day high has averaged above N1,500 this month, as hawkish traders continued to sell closer to the black market price.
– In the parallel market, where the exchange rate is traded unofficially, the dollar sold for around N1,495, while the UK pound traded between N1,895 and N1,900. Nigerians still rely on the parallel market to source forex for travel allowances.
Nairametrics projects that currency weakness could be imminent as we approach the summer holidays when many Nigerians travel abroad for vacations.
What You Should Know
Nigeria’s foreign exchange (FX) reserves surged to their highest level since March 28, 2024, marking a significant financial milestone that coincides with the longest period of a stable exchange rate seen in over a year.
– According to the latest data published by the Central Bank of Nigeria (CBN), the reserves now stand at $33.58 billion as of June 19, 2024.
– This achievement represents a notable recovery since the end of March 2024, when reserves were as high as $33.83 billion before a period of decline.
– The rise in FX reserves comes after three months of noticeable fluctuations, during which reserves plunged to a low of $32.11 billion on April 19, 2024, sparking concerns about the nation’s financial stability.
Meanwhile, the exchange rate for import duties collection by the Nigeria Customs Service (NCS) has remained at N1474/$ for the past three weeks, marking the longest duration of stability since January. The naira has stabilized around N1450/$ to N1490/$ in recent weeks following months of volatility since February 2024.
Checks on the customs exchange rate portal reveal that the FX rate for import duties collection has been adjusted only once this month, decreasing from N1482/$ to the current figure.
This article presents the key data and trends in a professional and concise manner while maintaining all essential information and quotes.
