Naira loses more value as demand pressure continues - Expert explains

The value of Nigerian currencies continues to depreciate against the US dollar and other foreign currencies at the forex market.

Data checks by Legit.ng show the naira at the official market, closed the trading week ending July 28, 2023, with a value of N775.76 at the investors and exporters window.

This is a 0.93% drop in value when compared with N768.60 which it exchanged for the dollar on Thursday, July 27.

However, on a week-on-week comparison, the naira showed a very slight improvement in value by N2.06 or 0.26% when compared to the exchange rate of N777.82/$1 on Friday, July 22 last week.

At the unofficial forex market, the naira also closed the week at a low exchanging to the dollar at N870 data from AbokiFX.

This represents a depreciation of 0.34 percent as the dollar traded at N870 on Friday compared to N867 since the beginning of the week.

Against the Pound Sterling and the Euro, the Naira closed the week at the unofficial market at the official market at N1,165/£1 and N942/€1, respectively.

Meanwhile, Johnson Chukwu, the Group Chief Executive Officer of Cowry Assets Management, has expressed concern over the lack of stability in Nigeria’s currency exchange rate system, attributing it to the fall in the value of the Nigerian currency, the naira.

Chukwu emphasized the importance of stability in the exchange rate, as it plays a vital role in boosting people’s confidence.

He said:

"When the exchange rate experiences instability, it generates uncertainty, eroding investor confidence and potentially triggering panic.

"The crux of the matter lies in attaining a certain degree of stability in the exchange rate, as this aspect holds paramount importance for economic agents.

"The actual numerical value of the rate may not be the primary concern for many; rather, the critical factor is its ability to establish a level of stability. Without this stability, uncertainties emerge, causing a subsequent decline in confidence and even inducing panic among stakeholders."

In another report, the Central Bank of Nigeria has responded to reports that it withdrew over 2,000 Bureau de Change operators' licenses.

The reports of withdrawal come amid the continued depreciation of the naira at the official and black markets.

The CBN and the Bureau De Change Operators of Nigeria spoke with Legit.ng to set the records straight.