The naira remained relatively stable, closing at a rate of N1,030 to the dollar on Tuesday, which was the same rate as the previous day. This stability marked a pause in the momentum it had gained in the previous week.

This represents a N80 loss or a 8.42 per cent decline of the local currency compared to the N950 it closed the week at last Friday.

Data from the FMDQ Exchange showed that the local currency also depreciated to N869.91/$ on Tuesday as against N809. 02 which it closed at on Monday.

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Analysts at Financial Derivatives Company (FDC) in an emailed note stated that the naira’s continued depreciation will intensify producer and consumer price pressures in the near term.

“As consumers’ real income falls, many more Nigerians will slip below the poverty line. We are likely to see increased price resistance and weak demand (compared to pre-pandemic levels) ahead of the festive period,” the analysts stated.

This is also the first time the naira is falling since the Central Bank of Nigeria began to clear some of its FX backlog last week.

Currency traders, also known as Bureaux De Change operators, said that the naira was trading at between N990 to N1,030/$.

The naira had hit successive record lows on the black market, where it trades freely, as excess demand on the official market gets funnelled to the unofficial market.

The central bank last week said it had started clearing outstanding foreign currency forwards owed to banks, with banking sources saying an initial payment of $1 billion had been made.

The naira crossed the N1,000/$ mark on the black market on September 26, the day newly-appointed central bank governor Olayemi Cardoso appeared before the Nigerian senate for his confirmation hearing.

The currency hit a record low of 1,300 naira per dollar on the black market, a month after it crossed the 1,000 naira mark, amid thin trading volumes on the parallel market and dollar shortages on the official market.


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by Chima Nwokoji