The value of the naira, Nigeria’s money, went down a lot in its exchange market. On Wednesday, July 10, 2024, the rate was N1,561.98 for every $1. This is called depreciation.
The FMDQ Securities Exchange, which keeps track of these things, said the naira lost 2% of its value. The day before, it was N1,532.58 for every $1.
This was the third time in a row that the naira lost value, even though Nigeria has more money in its reserves and more foreign exchanges happening.
This is also the lowest level since March 18, 2024, when it was N1,597.25 for every $1. This means the naira is getting close to N1,600 for $1, only three weeks after it went past N1,500 for $1.
The Naira Hit N1,585 in One Day
On Wednesday, the exchange market was very unstable. At one point during the day, the naira was worth N1,585 for $1. That means more people wanted to buy naira.
But later, it dropped to N1,475 for $1. These big changes within one day show that the market is very unpredictable and not stable.
Increase in Foreign Exchange Turnover
While the naira was falling against the dollar for three days, more foreign exchanges were happening.
On Wednesday, the total foreign exchanges went up by 25.78%, reaching $236.7 million. The day before, it was $188.19 million.
On Tuesday, it increased by 41.01%, and on Monday, it went up by 14.19%.
This week, from Monday to Friday, the foreign exchange turnover went up by 77.36%.
More Details
Earlier, Newslodge reported that Nigeria’s external reserves were $35.05 billion as of July 8, 2024. This is the highest level since May 30, 2023, when it was $35.09 billion, just before new foreign exchange policies were introduced in June 2023. This is the first time the reserves went over $35 billion under President Bola Tinubu’s administration.
It seems that the Central Bank of Nigeria’s (CBN) new policies and loans from banks like Afrexim and the World Bank helped grow these reserves.
However, the naira kept losing value despite CBN’s efforts to stabilize it.
Newslodge earlier guessed that the naira would get weaker as summer holidays come because many Nigerians travel abroad.
This recent drop happened even though the Central Bank Governor, Yemi Cardoso, said the worst is over for the naira’s instability.
In a London interview with Bloomberg TV, Cardoso said he is happy with how they’ve managed the money crisis in the past months.
When asked if the naira will get stronger or weaker, Cardoso said it depends on many issues, including government spending.
He also said they are working on it and will keep applying certain economic rules to make the market better.