Naira appreciates by 13%, ends 2023 at N907/$ at official market

The naira, on Friday, gained against the dollar at the official foreign exchange (FX) market, known as Nigerian Autonomous Foreign Exchange Market (NAFEM).

Data from FMDQ Securities, a platform that oversees foreign exchange trading in Nigeria, showed naira appreciated by 13.03 percent or N135.89 to N907.11/$ — from N1,043 per dollar on Thursday.

According to FMDQ, the local currency hit an intra-day trading high of N1,224.10 and a low of N700.

Naira, which opened at the rate of N911.67 to the greenback, closed at N907.11  

Meanwhile, at the parallel section of the market, the local currency appreciated by N10 or 0.82 percent to N1,215 on Friday — from N1225 traded on December 19, 2023. 

Currency traders, known as Bureau De Change (BDC) operators, quoted the buying rate at N1,200 and the selling price at N1,215 — leaving a profit margin of N15.

As a result, the exchange rate gap between the parallel and official markets widened to N307.89. 

In June 2023, the Central Bank of Nigeria (CBN) announced the unification of all segments of the forex exchange (FX) market into the investors and exporters (I&E) window, leading to naira devaluation.

Consequently, naira has witnessed diverse levels of volatility since the policy was implemented.

According to Bloomberg, the naira fell 55 percent this year, making the naira the third worst-performing currency in the world behind the Lebanese pound and the Argentine peso — among 151 currencies tracked by the media firm.

The publication also projected that the naira will record the worst performance in 25 years in 2024.

However, there are predictions that the currency will bounce back in the coming year. 

Bismarck Rewane, chief executive officer, Financial Derivatives,said Nigeria’s exchange rate is expected to rise in 2024.

Similarly, Olayemi Cardoso, CBN governor, also projected the exchange rate pressures will reduce significantly in the coming year.