The naira fell, on Thursday, to N956/$ on the official Investor and Exporter forex window as dollar supply declined by 46.77 per cent.
This is a 13.78 per cent decline from the N840.53/$ the naira closed trading on Wednesday according to data from the FMDQ Securities Exchange. Also, the turnover of dollars traded in the market fell to $105.50m from $198.21m on Wednesday.
The naira began trading at N800.90/$ for the day before hitting a high of N1136/$ and N615/$ within the day. It eventually closed trading at N956.33/$.
The instability of the naira has persisted despite recent moves by the Central Bank to clear the backlog of foreign exchange forward contracts. The naira is one of the worst-performing currencies in the world, losing about 40 per cent of its value since June, the World Bank recently disclosed.
Recently, the Economic Intelligence Unit, the research and analysis division of the Economist Group, disclosed that the CBN does not have the required firepower to clear the backlog of foreign exchange orders. This is expected to continue to put pressure on the naira.
It stated, “In Nigeria, an unsupportive monetary policy implies that the naira will remain under pressure, while the central bank lacks the firepower to adequately supply the market or clear a backlog of foreign exchange orders, which will keep foreign investors unnerved. High inflation and a continued spread with the parallel market will leave the exchange rate regime unstable and result in periodic devaluations.”