The Nigerian naira (NGN) strengthened against the leading trade currency, the US dollar (USD), on Monday, reaching N795.28 at the investors’ and exporters’ FX window. The supply level was sufficient to cover the whole amount registered by market participants for imports.
When compared to N803.90 converted to the dollar on July 14, the rate provided by FMDQ Exchange at the start of the week corresponds to a daily currency appreciation of 1.07 percent.
On Monday, the open indicative rate was N782.79 to one dollar, according to foreign market statistics. Traders stated the highest spot exchange rate recorded throughout the day’s trade was N832 to the US dollar before it ended at N795.28.
During the day’s trade, the Naira fell as low as N699.50 per greenback. On Monday, 34.55 million dollars were transacted in the investors and exporters window. The parallel market, on the other hand, saw more devaluation, with the Naira sliding 1.27% to N825 from N815.
Nigeria’s foreign currency reserves have fallen to $34 billion, representing six months of imports as the market continues to seek a market clearing rate. In the foreign exchange market.
MarketForces Africa asked investment banking specialists what would happen if the move to float the local currency failed to attract sufficient foreign currency inflows to put the naira on a stable footing.
For now, responses remain scanty as Broadstreet analysts continue to gauge market temperature. Nigeria lacks the industrial capability to produce goods that can compete effectively in international markets.
Due to the exchange rate advantage foreign currencies enjoy, analysts predict that remittance will spike as Nigerians in the diaspora send money home.
