Naira Declines Further as Foreign Exchange Turnover Drops by 71%

On Monday, the Nigerian naira fell significantly in both official and black markets, trading at ₦1,670.75 per dollar at the official rate and hitting ₦1,748 per dollar in the black market. This decline came as the foreign exchange (FX) turnover in the official market plunged by 71%, reaching only $81.17 million.

A currency trader, Muazu Yakubu, operating at the Lagos airport, reported, “The naira is selling at ₦1,748 per dollar, while we buy it for ₦1,742.” Another trader, Mallam Faruq on Lagos Island, confirmed similar rates, noting that he sold the naira at ₦1,746 per dollar and bought it at ₦1,740 per dollar.

Monday’s trading on the Nigerian Autonomous Foreign Exchange Market (NAFEX) saw the naira depreciate further, settling at ₦1,670.65 per dollar, down from ₦1,600 on Friday, with an exchange turnover of $284.93 million. The trading session at NAFEX recorded the naira’s highest exchange rate at ₦1,677 per dollar and its lowest at ₦1,585.67.

Market analysts projected that exchange rates may remain within a close range across various segments due to the Central Bank of Nigeria’s (CBN) increased focus on strategic foreign exchange interventions.

Meanwhile, the Central Bank of Nigeria and the International Finance Corporation (IFC), a World Bank Group member, announced a new agreement aimed at expanding local currency financing for Nigerian businesses. This partnership, the CBN and IFC said in a joint statement, would help mitigate foreign exchange risks and support vital sectors like agriculture, housing, and energy.

According to the statement, the IFC plans to significantly boost its naira investments, targeting over $1 billion in the coming years. The IFC emphasized the importance of this agreement, stating, “Many of these sectors require local currency financing, and IFC’s partnership with the central bank is a key tool in expanding access.”

This collaboration is expected to provide crucial support to Nigeria’s economy by managing currency risks and enabling businesses to access much-needed naira financing, particularly for sectors crucial to the country’s growth.