On Monday, the Nigerian Naira strengthened against the US Dollar by 0.54%. This was due to a decrease in demand for greenbacks in the parallel or black market.
Traders reported there is not much activity compared to previous occasions.
The appreciation of currency can be attributed to the Nigerian Central Bank’s (CBN) initiative since October 2022 that issued new banknotes and gave December 31, 2023 as a deadline for using old bills.
Furthermore, banks have reduced personal and business travel allowances to half due to deficit of dollars rate resulting from persistent dollar crunch international tight monetary landscape.
Over last week, the Naira depreciated slightly by 0.07% closing at N461.83 against USD from N461.50 on Thursday with most bid rates between 460-462 for one US Dollar at Investors and Exporters Forex window on Friday.
Moreover, reports from Nigerian Economic Summit Group predict that official exchange rate could reach 500 nairas per USD by 2023 due to factors such as stagnant oil production, capital reversal flow and shortage of FX inflow this year following foreign reserves drop 8.2% to 37$ billion in 2022 from 40$ billion at start of covid pandemic in 2020.
This article was updated 3 months ago
