Indications are showing that the local currency is set to fully reverse its gains as the depreciation trend enters a new height, hitting N1,740 to $1 in the parallel market at the close of trading last weekend.
But, the Naira remained stable with minor appreciation in the Nigerian Autonomous Foreign Exchange Market (NAFEM), as dealers speculate that the Central Bank of Nigeria, CBN, would likely intervene any moment from now to curtail the pressure on the exchange rate.
Data from FMDQ showed that the indicative exchange rate for NAFEM fell to N1,600 per dollar from N1,601.2 per dollar on Thursday, indicating N1.2 appreciation for the naira.
Dealers who spoke to Financial Vanguard at the weekend said they expect the exchange rate to close this month around N1,750 to $1 while 2024 may end at over N1,800 to $1.
If this trend continues, by the end of the year, the local currency will have wiped out the gains it made in March this year when it suddenly appreciated massively, climbing down from an all-time high rate of N1,820 to $1 in February 2024 to N1,310 to $1 and further down to N1,240 per $1.
The appreciation was however halted in April; subsequently, depreciation began and sustained until last week.
Year-on-year (YoY), Naira depreciated in the parallel market by 70.5 per cent to N1,705 per dollar at the close of the third quarter trading on September 30, 2024, from an average of N1,000 to $1 in September 2023.
Year-to-Date, YtD, depreciated by 16.7 per cent from N1,490/ $1 in January 2024.