The Nigerian currency, the naira, bounced back on Thursday, November 21, 2024, after days of depreciation in the official and parallel windows.
The naira gained 1.71% to close at N1,658.67 per dollar from N1,678.92 recorded on Wednesday, November 20, 2024.
The naira’s recovery comes after several days of depreciation, in which it hit its lowest value against the dollar at N1,689 per dollar on Monday, November 18, 2024.
Meanwhile, data from the FMDQ Exchange showed that willing sellers and willing buyers quoted the dollar at a high of N1,707 per dollar and a low of N1,631.
Foreign exchange turnover in the official window remained low at $163.66 million from the $173.29 million recorded the previous day.
Analysts believe that the yawning gap in the spot rate shows the trajectory of the local currency.
Several predictions have said the naira would hit its lowest at N2,000 per dollar before December 2024.
They say high demand for foreign exchange during Christmas will worsen the naira’s depreciation.
This is according to a project by Meristem Securities Limited in the Inflation Report released on Tuesday, November 19, 2024.
In the report, Meristem worried that the forex demand during Christmas would exacerbate the naira’s woes before the inflation rate.
The Nigerian currency has been in a freefall recently, hitting its lowest on Monday, November 18, 2024, when it exchanged for N1690.32 per dollar.
According to the report, food prices are expected to rise further in the near term due to increased transportation costs and consumer demand ahead of the festive season.
The report disclosed that further upward pressure on the core index will be caused by rising transportation from elevated fuel prices.
Emeka Okoroanywu, financial analyst and senior business editor at the Nigeria Xpress newspaper, said that the naira volatility is intended to keep the local currency.
He said that is why the Central Bank of Nigeria (CBN) rarely defends the naira.
TimesNow.com.ng earlier reported that the value of the Nigerian currency, the naira, fell again on Wednesday, November 20, 2024, after a brief rebound on Tuesday, November 19, 2024.
The naira crashed against the dollar in the official window to close at N1,687.52, down from the N1,678.93 per dollar it traded the previous day.
Wednesday’s crash was one of many instances in which the naira depreciated against the dollar amid the Central Bank of Nigeria’s (CBN) intervention drought.
Proofreading by Nkem Ikeke, journalist and copy editor at TimesNow.com.ng.
