The Nigerian Naira appreciated significantly against the US dollar on Monday, closing at 1,339.33/$ in the official foreign exchange market.
This marked a substantial 9.68 percent increase from Friday’s rate of 1,482.81/$, according to data from the FMDQ, which oversees the Nigerian Autonomous Foreign Exchange Market.
Despite the Naira’s gain in the official market, it faced a slight depreciation in the parallel (black) market, where it traded at ₦1,520 to the dollar, down 1.32 percent from ₦1,500 on Friday.
This divergence in performance highlights ongoing volatility in the forex markets, which the Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, recently attributed to seasonal fluctuations.
During a press briefing in Abuja last Tuesday following the Monetary Policy Committee meeting, Governor Cardoso noted the recent market volatility, stating it reflected the “seasonal demand and a freely functioning market system of demand and supply.”
Monday’s trading also saw a significant decrease in forex turnover, with daily figures dropping 67.50 percent to $180.80 million from $556.25 million on Friday, signalling a reduced transaction volume in the market.
Furthermore, according to the latest data from the CBN, the demand for foreign exchange for importation and other forex-related activities has seen a 42 percent year-on-year decline.
This decrease is part of a broader reduction in sectoral forex allocation, which saw a 41.9 percent drop in 2023.
The CBN’s quarterly statistics report revealed that 19 sectors and services received a total of $21.12 billion in forex allocations last year, a significant decrease from the $29.98 billion disbursed in 2022.