The exchange rate between the naira and the US dollar appreciated N1,541.52 at the official Investor and Exporter (I&E) window on Friday, September 20, 2024.
This represents a 0.16% gain from the N1,544.02 recorded on September 19, 2024, with the naira trying to stabilize within the N1,500 range.
Positive news developments, like the NNPC’s efforts to revive $29.8 billion in LNG projects and the government’s MoU with Russian firms to restart the Ajaokuta Steel Plant, could tilt big currency players in favor of the naira.
Key Data Points
Closing Exchange Rate: The naira closed at N1,541.52 on September 20, 2024, marking a 0.16% appreciation from the previous day’s rate of N1,544.02.
Intra-day Highs and Lows: During Wednesday’s trading session, the naira reached a high of N1,672.00/$1 before retreating to a low of N1,535.00/$1, eventually closing at N1,541.52.
Market Turnover: Market turnover surged to $190.57 million on September 20, reflecting a 117% increase from the $87.51 million recorded the day before. In August, turnover amounted to $3.3 billion, down from $4.34 billion in July.
Parallel Market Rates: In the parallel market, the naira opened at N1,640.32, experiencing moderate volatility as it fluctuated between N1,650.33 and N1,617.52, before closing at N1,639.45.
Market Trends
Since mid-July, the naira has mostly hovered around the N1,600 range, facing challenges in appreciating against the dollar after falling to N1,400 zone in May.
Year-to-date, the naira has depreciated by approximately 76%, driven by rising inflation and increased demand for dollars. Despite these pressures, Nigeria’s external reserves rose slightly from $36.305 billion on August 30 to $36.730 billion by September 10.
What to Know
The naira is holding within the ₦1,500 zone, benefiting from a weaker US dollar against some major currencies.
Federal government’s MoU with Russian firms to revive the Ajaokuta Steel Plant and National Iron Ore Mining Company is expected to foster positive economic sentiment.
NNPC has resumed talks with investors to restart two major LNG projects, Brass and Olokola, worth $29.8 billion.
What to expect
- With more positive fundamental developments, such as the revival of key industrial projects and continued weakness in the US dollar, the naira could strengthen further in the coming weeks.
- Optimistic economic policies and market conditions may encourage big currency players to back the naira for the long term, pushing it towards a firmer position.
- Government policies aimed at easing the pressure of dollar demand will further strengthen the naira.
