The exchange rate between Nigeria’s naira and the US dollar dropped to a four-month low of N1,611 on Monday, July 29th, 2024, in the official Investor and Exporter window.
This information comes from FMDQ, where official currency trading happens.
The naira’s value fell on Monday, undoing the gains from last week when the central bank sold foreign currency to traders.
What the data is saying
FMDQ data shows the naira was N1,611.40 to the dollar on Monday, July 29th, 2024, down from N1,609 last Friday.
- During the day, rates ranged from N1,622/$1 to N1,500/$1, showing a big difference in rates.
- Market turnover was $179.34 million, up from $168.3 million on Friday. In July, the total turnover is around $3.7 billion, up from $3.3 billion for all of June 2024.
- In the parallel (unofficial) market, exchange rates were between N1,590 and N1,600, a bit less than the official rate.
- The exchange rate has dropped by 7% in July, the biggest monthly drop since February when it fell 9%.
- January 2024 was worse, with a 60% drop in one month.
- Since the start of the year, Nigeria’s exchange rate against the US dollar has fallen by 77.6% due to new forex policies aiming for rate stability.
Nigeria’s external reserves were $36.5 billion as of July 26th, 2024.
Why the depreciation
Experts at Newslodge noted that the exchange rate started falling in late June when it went over N1,500/$1 for the first time since May.
- Rates stayed low into early July and kept going down as the month progressed.
- By July 10th, the rate fell to N1,560 and kept dropping.
- Sources say the drop is due to higher demand from importers who need inventory, equipment, and raw materials.
Newslodge also found that demand pressure comes from retail and investor markets.
What you should know
Newslodge reported last week that the exchange rate had dropped to a four-month high of N1,603, causing the central bank to sell about $148 million to retail forex traders.
- This was the third sale to authorized FX dealers this month as the CBN tries to increase liquidity in the forex market.
- Two weeks ago, the CBN announced the sale of $106.5 million in forex to 29 dealer banks.
- The federal government plans to issue $500 million in domestic foreign currency-denominated bonds in three to four weeks.
- Wale Edun, the Minister of Finance, spoke about this during a press briefing in Abuja, titled ‘Economic Recovery and Growth: Progress and Prospects 2024’.