The naira depreciated on Tuesday, February 11, 2025, in the official and black market as demand pressures increased......CONTINUE READING THE ARTICLE FROM THE SOURCE>>>>>
At the end of Tuesday’s trading, the Nigerian currency lost N11, depreciating by 0.7%. The US dollar traded at N1,513 relative to N1,502 it sold the previous day.
The naira depreciates in the black market
According to data from the Nigerian Foreign Exchange Market (NFEM), the naira opened trading at N1,508%, slightly lower than the N1,504 per dollar it traded on Monday, February 10, 2025.
The naira also lost N10, trading at N1,580 per dollar in the parallel segment of the foreign exchange market after opening at N1,570.
Abbas Yishau, a currency trader, told Legit.ng that high demand for the US dollar returned after a brief hiatus, leading to the local currency crash.
“We are seeing heightened demand for the dollar and other foreign currencies. This has put pressure on the naira, leading to its crash,” he said.
The naira experienced a bullish run all through January, leading analysts to believe it may have found its actual value when it peaked at N1,475 per dollar.
CBN launches interventions to save the naira
However, the naira’s negative run began in February, when the Central Bank of Nigeria (CBN) launched a series of interventions to boost the currency’s value and increase liquidity and transparency.
The apex bank launched the FX Code to boost foreign exchange supply and transparency.
The bank anchored the Code on six pillars and warned banks and currency dealers of severe consequences if they violated it.
Additionally, CBN extended the weekly sales of $25,000 to Bureau de Change (BDC) operators.
The naira’s depreciation came amid the decline in Nigeria’s foreign exchange reserves.
Foreign reserves depreciate
Nigeria’s FX reserves declined by about $1.19 billion in three weeks, despite the Central Bank of Nigeria (CBN) ‘s moves to stabilise the naira.
Data from the CBN shows that gross FX reserves reached a high of $40.92 billion on January 6, 2025, up from $40.977 billion in December 2024.
The reserves began to moderate from $40.56 billion as of January 13, 2025, to $39.723 billion as of January 31, 2025.
The decline was revealed as CBN had not published the external reserves’ position in February.
However, Financial Derivatives Company (FDC) disclosed in its outlook report that Nigeria’s gross external reserves would drop by 11.47% in 2025 to $36.21 billion in 2025 and $37.65 billion in 2026 from a high of $40.9 billion in 2024.
Speculators lose Big as the naira remains stable
Legit.ng earlier reported that The Nigerian naira has continued to rally, though it is still somewhat sluggish, trading at N1,500.41 in the official Foreign Exchange Market (NFEM).
Last week, the local currency closed at the parallel market at N1,540 per dollar, signalling hope of a more stable FX rate on the streets.
Experts said currency speculators lost over N10 billion as the naira continues to rally against major currencies, and they predict more losses.