Nigeria’s currency on Thursday depreciated by 1.02 per cent (N4.83/$1) at the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange (FX) market.
After trading on Thursday the dollar was quoted at N469.50 compared to N464.67 quoted since May 31, 2023, I&E window, data from the FMDQ indicated.
The local currency also weakened against the dollar on Thursday, at the parallel market, also known as black market, losing 0.39 per cent (N3).
During the trading session on Thursday the dollar was quoted at the rate of N763 as against N760 on Wednesday.
The naira depreciation has been blamed on strong demand for dollars by individuals for travel allowances and school fees.
Naira has since last week steadied at N464.67 per dollar at the Investors and Exporters forex window despite a decline in the market liquidity on Wednesday.
Most currency traders who participated at the foreign exchange auction on Wednesday maintained bids between N460/$1, lower and N467/$1, higher bid.
The daily foreign exchange market liquidity declined by 24.57 percent to $140.31 million on Wednesday from $186.02 million recorded on Tuesday, data from the FMDQ indicated.
President Bola Ahmed Tinubu had in his inaugural speech on May 29, 2023 signalled plans for a single exchange rate. He said monetary policy needs thorough house cleaning and that the Central Bank must work towards a unified exchange rate.
This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.
“The naira volatility has underpinned our slow economic growth and fuelled an inefficient informal market,” Aminu Gwadabe, national president, Association of Bureau De Change Operators of Nigeria (ABCON).
Multiple exchange rates he said are ground and encourage illegal economic behaviour for rent seeking, currency substitution and hoarding, adding that the lack of unified exchange rates has acute shortages in the retail end sector of the market where the spikes and volatility is most pervasive.