Access, Zenith, UBA, currency dealers sell dollar at new rate as naira nears two-week low

The Nigerian currency, the naira, slumped against the US dollar in the official and parallel markets on Thursday, May 9, 2024.

The naira closed at N1,459 per dollar in the official market, depreciating by N38.67 compared to the previous rate of N1,421.06 on Wednesday, May 8, 2024.

In the parallel end of the market, the naira traded at N1,455 per dollar, recording a marginal from the N1,450 it traded the previous.

Data from NAFEM shows that the foreign exchange market recorded a 48.77% decline in turnover at $84.38 million on Thursday, May 9, 2024, compared to the $164.74 million recorded on Wednesday, May 8, 2024.

Traders quoted the dollar at a high of N1,465 and a low of N1,331 per dollar.

Nigeria’s FX reserves rise

The development comes as Nigeria’s foreign reserve recorded a boost in the last three weeks.

After several weeks of depletion, Nigeria’s foreign exchange reserves increased marginally by about $262 million in 19 days.

Data from the Central Bank of Nigeria (CBN) reveals an uptick in reserves, closing at $32.369 billion as of May 7, 2024, up from the $32.107 billion recorded in the previous month.

Nigeria’s reserves have experienced a steady decline from $34.45 billion in March 2024 due to falling oil prices, debt servicing, and other CBN obligations.

CBN denies defending the naira with reserves

The decline in the reserves led to the speculations that the apex bank was defending the naira with reserves.

According to reports, the Nigerian FX reserves witnessed a decline of about $2 billion in April.

The CBN denied the reports that it was not intervening in the foreign exchange markets with the proceeds from the reserves.

Reports say the FX reserves are currently at a 26-day high compared to the April 12, 2024 figure of N32.612 billion.

The naira on a three-week decline

The country’s foreign reserves declined noticeably for over a month, beginning at $34.450 billion on March 18, 2024.

The reserves are the country’s firepower against the depreciation of the naira, which has dropped in value against the US dollar.

The naira has consistently depreciated against the US dollar and other major currencies in the last two weeks after emerging as the world’s best-performing currency in April.