The Nigerian Naira experienced a significant drop, reaching a historic low of N1,320 per dollar—3.03% weaker than the previous day's closing rate of N1,280. This marks the lowest point since October 26, 2023.
Analysts attribute the fall to a surge in demand for dollars. Businesses restocking, individuals needing funds for overseas studies, and a notable departure of diaspora Nigerians after the holiday season have all contributed to the heightened demand.
Forex turnover skyrocketed by 460.52% to $147.81 million on January 16, 2024, in the official markets. As international schools reopened, students rushed to restock for tuition fees and holiday allowances.
Olatunde Amolegbe, former President of the Chartered Institute of Stockbrokers, emphasized the crucial role of confidence in stabilizing the exchange rate. Structural changes, such as improved security, better infrastructure, increased foreign direct investments, and promoting local production, were highlighted as essential for long-term stability. Experts anticipate that rebuilding confidence and implementing strategic changes will be key to navigating the challenges and restoring stability in Nigeria's foreign exchange market.
Source: Nairametrics
