Naira again falls to record as dollar sales decline further

Naira on Monday fell to another record low against the dollar following another decline in dollar sales at the official foreign exchange (FX) market in Nigeria.

Dollar sales by banks, as well as willing buyers and willing sellers dropped by 26.59 percent to $66.43 million on Monday from the previous decline of $84.10 million on Friday.

After trading on Monday, the naira fell to an all-time low of 1,574.62 per dollar, representing a 2.33 percent weaker than N1,537.96/$1 on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

Intraday high weakened to N1, 712 on Monday from N1,631 on Friday, while the intraday low also depreciated to N1,100 as against N1,000 on Friday, data from the FMDQ Securities Exchange indicated.

At the parallel market, commonly referred to as black market, naira also fell to a record low of N1,710 on Monday compared to N1,650 on Friday.

In the last 10 years, the country’s currency has depreciated by 89.73 percent at the official market and has continued to weaken against the US dollars, resulting in rising inflation, erosion of purchasing power, reduced investment and pressure on businesses.

One dollar was quoted at N1,517.20 (CBN rate) as of February 14, 2024, weaker than N155.75 on February 14, 2014, data from the central bank showed.

The country’s external reserves, which give the CBN the firepower to defend the naira, have also declined in the past 10 years by 6.35 percent following low foreign exchange earnings due to volatility in oil prices and strong demand for FX, among other reasons.