Naira Trades for N1,035/$ In the Nigerian Autonomous Foreign Exchange Market

It was reported that the Naira declined in the Nigerian Autonomous Foreign Exchange Market (NAFEM). As of yesterday, Nigeria's official exchange rate window closed at N1,035.12/$ compared to Tuesday when the dollar traded for N988.46/$. 

This data was obtained from the FMDQ Securities Exchange. The country's local currency started the new year in the official market on a weaker trend on Tuesday compared with the N907.11/$ when it closed last week Friday.

Traders said the local currency fell in the parallel market yesterday to N1,222/$. Last Thursday, Naira traded for N1,043/$ in the official market, leading Bloomberg to rate the country's local currency in a report among the list of the world's worst-performing currencies in 2023. 

The report stated that the Nigerian Naira recorded its worst performance since Nigeria returned to democracy in 1999. Based on the analysis, it showed that Naira will continue declining in 2024.

Commenting on this, the news agency reported that Vetiva Capital Management Limited stated that the country's local currency would decline until the federal government attracts international investors or ramps up oil output. 

Last Friday, the federal government revealed that it received a $2.25 billion foreign exchange support facility from the African Import-Export Bank (Afrexim) bank. This was disclosed by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, who said that the first tranche of the $3.3 billion facility from the bank.

The Minister said that the loan focuses on resolving the acute FX shortage that has negatively affected the country's economy. He stated that the balance of $1.05 billion would be received in the first week of January. 

In his address at the Chartered Institute of Bankers of Nigeria (CIBN) annual dinner on November 24, Central Bank of Nigeria (CBN) Governor Olayemi Cardoso said the apex bank will introduce a set of new rules and guidelines to achieve exchange rate stability.

He said

• Clear, transparent, and harmonized rules governing market operations are essential to ensuring the proper functioning of domestic and foreign currency markets. New foreign exchange guidelines and legislation will be developed, and extensive consultations will be conducted with banks and FX market operators before implementing the new requirements.