Breaking: Naira volatility continues as Intra-day high reaches N1,712 amid rising forex demand

The Naira experienced a sharp depreciation against the US dollar on February 19, 2024, reaching an intra-day high of N1,712.  

The domestic currency depreciated by 3.78% to close at N1,598.54 to a dollar at the close of business, data from the NAFEM where forex is officially traded, showed. 

• This represents an N60.58 drop or a 3.78% decrease in the local currency compared to the N1,537.96 closed on Friday.
• The intraday high recorded a record high of N1712/$1, while the intraday low was N1100/$1, representing a wide spread of N612/$1.
• According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $66.43 million, representing a 21% decrease compared to the previous day.
• Similarly, the Naira depreciated against dollar in the parallel forex market, where forex is unofficially traded, with the exchange rate quoted at N1,655/$1, reflecting a 3.93% decrease from the N1,590 rate it closed at the previous day.
• Additionally, the Naira weakened against the Euro by 4.09%, closing at N1720/EUR1 compared to N1650/EUR1 reported the previous day.
• The Great British Pound (GBP) closed at £1/N2040, a decline from £1/N1,930 recorded the previous day, this marks a notable decrease of 5.39% or N110 compared to the N1,930 rate recorded the previous day.

In the cryptocurrency market where forex is sold using stablecoins, the Naira also settled at N1,717.01/$1. 

Nairametrics reported that the parallel market exchange rate has experienced a significant decline, plummeting to a record low of N2040 per Great Britain Pound (GBP), driven by persistent demand pressures that continue to erode the currency’s value.   

• This marks a notable decrease of 5.39% or N110 compared to the N1,930 rate recorded the previous day.
• This depreciation stands as an unprecedented occurrence, representing the lowest point in the historical performance of the Naira.

The current economic situation requires effective and comprehensive measures to address the underlying factors driving currency depreciation and inflation.