The Nigerian naira has fallen further against the US dollar, with the exchange rate reaching N1637.59 at the close of business on Tuesday. According to figures from the Nigerian Autonomous Foreign Exchange, the naira fell by N14.63 versus the dollar, from N1622.96 on Monday.
This loss represents a 0.90 percent drop in the naira’s value against the dollar, making it more expensive for Nigerians to buy international products and services. The FMDQ data revealed that the foreign currency market had a considerable turnover of $143.15 million, indicating a high level of trading activity.
The naira witnessed a tumultuous trading session against the dollar on Tuesday, with the spot rate closing at N1637.59, a slight appreciation of N3.61 from the opening rate. However, the forward rate told a different story, with a high of N1,655.00 and a low of N1,499.00, indicating significant fluctuations in the market.
On Friday, local currency made a strong comeback in the official foreign exchange market, appreciating by 2.9 per cent against the dollar. This uptrend was driven by a significant increase in dollar supply, totaling $245.17m.
The naira gained ground as the dollar was traded at N1,593.32 on Friday, compared to N1,639.41 on Thursday. Meanwhile, this development coincides with the recent drop in global oil prices, which currently sell below $70 per barrel.
Nigeria’s economy is heavily reliant on the oil sector, which generates over 80 per cent of government revenue and accounts for approximately 90 per cent of export earnings, characteristic of a mono-product economy.
Former Chief Economist of Zenith Bank Marcel Okeke stated that the combination of pipeline vandalism, organised youth involvement, and the sudden crash in oil prices has severely endangered the oil sector, which is crucial for oil exploration and production.
“The reduction in revenue, coupled with the government’s increased borrowing from dollar-based bonds, spells disaster for the economy,” Okeke said.
