As Nigeria prepared to celebrate Christmas, the Naira suffered a setback against the US dollar in the foreign exchange markets. According to official data from FMDQ, the Nigerian currency weakened by 2.71% to N885.88/$1. This depreciation, equivalent to N23.97, marked a significant shift from its Thursday closing rate of N861.91.
Simultaneously, the Naira also experienced a decline in the parallel forex market, where unofficial trading occurs. The exchange rate dipped by 0.16%, with rates quoted at N1230/$1, while peer-to-peer traders set their quotes at approximately N1163.35/$1 on Friday.
This trend follows a 22% decrease in forex turnover to $92.16 million, indicating potential financial implications for Nigerians during the Christmas season, with increased spending on dollar-related purchases.
The fluctuating nature of the Naira in the forex market has been evident since the introduction of FX reforms by the Central Bank of Nigeria on 14th June, 2023. Despite this volatility, reassurance has come from the Governor of the Central Bank, Olayemi Cardoso, who recently affirmed his expectations for the Naira to strengthen in the FX market in 2024.
