In a startling development, the Nigerian naira witnessed a significant depreciation of 13.95 percent, closing at N996 per US dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the official exchange rate window of the country.
According to data from FMDQ Securities Exchange, the leading platform overseeing foreign exchange (FX) trading in Nigeria, the naira experienced extreme volatility throughout the day. It reached an intra-day high of N1,100 against the US dollar, plunging to a low of N744 before closing at N996.75.
This represents a staggering loss of N122.04 when compared to the previous day’s rate of N874.71. The total value of trades conducted at NAFEM on this day amounted to $228.54 million.
Simultaneously, in the parallel section of the market, the naira managed to appreciate slightly by 14.81 percent, closing at N1,150 per dollar on Thursday, compared to N1,135 per dollar on Wednesday.
Amidst these turbulent currency fluctuations, the Central Bank of Nigeria (CBN) moved to reassure the public. The CBN reaffirmed that all existing banknotes remain legal tender, seeking to quell concerns among some members of the public regarding the legality of old naira currency.
The apex bank also addressed rumors of cash shortages, assuring the populace that there is an adequate stock of currency notes to facilitate normal economic activities.
In a related announcement on October 31st, the CBN emphasized that there are no plans to redenominate the country’s legal tender, the naira. This clarification comes in response to speculation about potential currency reforms that had caused uncertainty among citizens and businesses.
The naira’s depreciation and its subsequent volatility highlight the challenges faced by Nigeria’s foreign exchange market. The CBN’s efforts to stabilize the currency and provide clarity regarding the legal status of banknotes aim to restore confidence in the nation’s financial system.
Market analysts will closely monitor the situation in the coming days, as the foreign exchange market remains a critical barometer of Nigeria’s economic stability and resilience in a global financial landscape.