Naira Deprecates Sharply Against Dollar, Faces Uncertainty Amid Mixed Forecasts

Naira Depreciates Against Dollar Amid Mixed Fortunes

The Nigerian naira took a hit on Friday, ending the week on a negative note against the US dollar. According to FMDQ data, the naira depreciated to N1579.89 per dollar, representing a N15.41 depreciation from N1,564.4 exchanged on Tuesday.

The decline comes after a significant appreciation on Thursday, which raised hopes of a turnaround in the naira’s fortunes. However, the currency’s performance was mixed this week, following the introduction of the Retail Dutch Auction System (RDAS) by the Central Bank of Nigeria.

In contrast, the naira remained unchanged at N1600 per dollar at the black market on Friday, mirroring the previous day’s rate. This indicates that the unofficial market, where many Nigerians buy and sell foreign currencies, is less affected by the official exchange rate.

The introduction of the RDAS aimed to increase liquidity and stability in the foreign exchange market. While the system has had a positive impact, it appears that it has not been enough to stabilize the naira’s value.

The naira’s performance is closely watched by investors and policymakers, as it can have a significant impact on the country’s economy. The currency’s depreciation can lead to higher import costs, inflation, and a weaker economy.

As the world continues to monitor the naira’s fluctuations, it remains to be seen whether the RDAS will be able to stabilize the currency’s value in the long term.