Naira Slumps Against Dollar as FX Transaction Turnover Drops
The Nigerian naira has started the week on a weak note, depreciating against the US dollar at the foreign exchange market. According to data from FMDQ, the naira dropped to N1,562.66 against the dollar on Monday, representing a loss of N21 compared to the N1,541.02 per dollar recorded last Friday.
The parallel foreign exchange market also saw the naira fall slightly to N1,665 per dollar on Monday, down from N1,663 exchanged last Friday. This decline comes as foreign exchange transaction turnover dropped to $100.21 million on Monday, a significant decrease from the $190.57 million recorded at the end of last week.
The development has sparked concerns among economists and investors, who are now eagerly awaiting the outcome of the Central Bank of Nigeria’s (CBN) 297th Monetary Policy Committee meeting, which kicked off in Abuja on Monday. The meeting is expected to take a key monetary policy stance at the end of Tuesday, which could have a significant impact on the country’s economy.
The CBN’s decision is likely to be influenced by the current state of the foreign exchange market, which has been plagued by a shortage of dollars. The decline in FX transaction turnover has led to a decrease in the availability of dollars, causing the naira to weaken against the US currency.
The impact of the naira’s depreciation on the economy is likely to be significant, particularly for importers and businesses that rely heavily on foreign exchange. The CBN’s decision on interest rates and other monetary policies will be closely watched by investors and economists, who are hoping for a solution to the country’s economic woes.
As the CBN meeting draws to a close, one thing is clear: the naira’s depreciation against the dollar is a sign of the country’s economic challenges, and the CBN’s decision will have a significant impact on the economy’s future direction.
