On Wednesday, September 18, 2024, the value of the naira compared to the US dollar became better. It was N1,539.65 for each dollar. This happened because the dollar got weaker when the U.S. Federal Reserve cut their interest rates by 50 points.
The naira went up by 7.05% from the previous rate of N1,656.49 on September 17, 2024. The day before, the naira’s value had briefly gone over N1,600 because the market was unstable.
The naira went up because the dollar went down. Now, the naira is back in the N1,500 range.
If things stay good in the market, the naira might go up even more and reach the N1,400 range soon.
Key Facts:
Closing Exchange Rate: On September 18, 2024, the naira closed at N1,539.65, which is a 7.05% increase from N1,656.49 the day before.
Highs and Lows of the Day: During Wednesday, the naira’s value ranged from a high of N1,670.00/$1 to a low of N1,530.00/$1 before ending at N1,539.65.
Market Turnover: On Wednesday, $139.48 million were traded, which is 38% more compared to $100.39 million on September 17. In August, the total amount traded was $3.25 billion. This was less than $4.34 billion traded in July.
Parallel Market Rates:
On the parallel market, the naira started at N1,590.01/$1. But it changed a lot, hitting a high of N1,661.25/$1 and a low of N1,589.11/$1 before closing at N1,639.43/$1.
Market Trends:
Since mid-July, the naira has stayed around the N1,600 range with some ups and downs. For example, on September 13, it went up to N1,639.20, then down to N1,656.49 on September 17.
This year up to now, the naira lost about 76% of its value because of high inflation and more people wanting dollars.
But even with these problems, Nigeria’s external reserves went up a little. It went from $36.305 billion on August 30 to $36.730 billion by September 10.
Important to Know:
The U.S. Federal Reserve lowered interest rates by 50 points, from 5.50% to 5.00%. This made the dollar weaker compared to other big currencies. People had been talking about this rate cut earlier in the week, which caused the dollar to lose value.
The Federal Reserve made the announcement at around 7 p.m. in Nigeria. The market had already expected this change, giving the naira a chance to get stronger.
As a result, the naira went up by 7.05% and ended at N1,539.65.
What to Expect:
- If people keep feeling negative about the dollar, the naira might keep getting stronger.
- Investors being cautious about the U.S. economy could also help the naira.
- Better economic conditions, like lower inflation and less fuel scarcity, could help the naira too.
- Policymakers need to make smart choices to keep the naira strong.