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The exchange rate between the naira and the US dollar depreciated by 3.61% at the official Investor and Exporter (I&E) window on Monday, September 10, 2024.

According to data from FMDQ, which tracks official currency transactions, the naira’s depreciation on September 10 had the naira fall to N 1637.59.

The exchange rate experienced a depreciation that made it cross the N1,600 zone compared to yesterday’s close at N1,580.46.

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Key Data Points 

Closing Exchange Rate: The naira closed at N1,637.59 on Tuesday, September 10, 2024, representing a 3.61% drop from its previous close of N1,580.46 on Monday.

Though this reflects short-term volatility, investors remain watchful for stabilization.

Intra-day Highs and Lows: During the trading session, the naira reached an intra-day high of N1,655.00/$1 and a low of N1,499.00/$1, as the currency tried to find a balance against the dollar.

Market Turnover: The day’s market turnover stood at $143.15 million, lower than the $197.37 million recorded on the previous trading day.

Meanwhile, total market turnover reached $3.25 billion in August 2024, compared to $4.34 billion in July, representing a decline of $1.08 billion.

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Parallel Market Rates 

In the parallel market, exchange rates ranged between N1,646.38 and N1,638.02, remaining slightly above the official window rate.

Market trends 

Since mid-July, the naira has fluctuated within the N1,600 range, reaching a high at N1,660 before closing at N1,619 last Friday.

After appreciating at N1,580.46 on Monday, September 9, the currency closed above the 1,630 zone.

Year-to-date, the naira has depreciated by approximately 86%, driven by inflationary pressures and increasing demand for the dollar. Nevertheless, Nigeria’s external reserves stand at $34.66 billion as of July 2024.

What You Should Know

Global crude oil prices have been experiencing downward pressure and crude oil is a critical factor in Nigeria’s foreign earnings.

Brent crude futures dipped below $70 per barrel for the first time since December 2021, driven by concerns over global supply and demand.

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U.S. West Texas Intermediate (WTI) crude prices also fell by 42 cents, or 0.6%, to $68.29 per barrel.

What to expect

  • While the naira’s recent decline highlights ongoing volatility, a brighter outlook remains possible as global markets continue to shift.
  • Crude oil prices, a critical factor in Nigeria’s foreign earnings, are currently under pressure, but corrective measures could ease the strain on the naira.
  • If oil prices stabilize or improve, the naira could strengthen against the dollar alongside positive sentiment.
  • Moreover, the implementation of efficient economic measures will be key to maintaining investment confidence and fostering a more stable exchange rate.

Source: Nairametrics

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