The Nigerian naira experienced a modest uptick against the US dollar, reaching N1,609 on Wednesday at the official market, compared to the previous day’s rate of N1,615.94, marking a 0.37% increase of N6.
This marginal improvement follows recent foreign exchange directives from the Central Bank of Nigeria. Despite this, the Monetary Policy Committee hiked the benchmark interest rate to 22.75% from 18.75% in July 2023, alongside adjustments to other monetary policy parameters.
However, the anticipated effects of these policy adjustments have not yet reflected in the official foreign exchange market, as the naira depreciated by 2.04% against the dollar on Tuesday, according to data from the FMDQ securities exchange.
Government officials continue to assert that the naira is undervalued, with data from FMDQ indicating a drop to N1,615.94/dollar on Tuesday from N1,582.94 on Monday.
Spot trading on Wednesday saw fluctuations, with the intraday high depreciating to N1,660 and the low marginally increasing to N1,401. Daily FX market turnover declined further to $119.14m.
At the parallel market, the dollar’s selling price varied significantly throughout the day, with BDC operators noting frequent changes and reduced trading activity due to security concerns.
Despite promises from the CBN to allocate $20,000 to each BDC at a rate of N1,301/$, operators had yet to receive their allocations as of Wednesday night.
