The naira depreciated significantly against the US dollar, closing at N1,669.15 in the official Investor and Exporter (I&E) window.
This marked an 8.25 per cent drop from its previous closing rate of N1,541 on the last trading day of September, continuing the naira’s struggle to regain stability amid volatile market conditions.
The naira’s volatility throughout the trading session was evident, with intra-day fluctuations seeing a high of N1,699.00 and a low of N1,550.00 before settling at N1,669.15.
This dramatic swing highlighted ongoing uncertainty in the market as foreign exchange demand pressures continue to weigh on Nigeria’s currency.
In parallel markets, the naira fluctuated within a similar range, opening at N1,668.33 and closing slightly higher at N1,670.74.
The drop in turnover also added to concerns, as market turnover in the I&E window declined from $181.86 million to $176.45 million on October 2, a 2 percent decrease.
By comparison, total turnover for September reached $3.3 billion, pointing to shrinking liquidity in recent trading sessions.
Economic analysts attribute the naira’s depreciation to several factors, including persistent inflationary pressures, heightened demand for foreign currency, and overall dollar strength in the global markets.
The year-to-date decline of approximately 75 per cent in the naira’s value further underscores the depth of Nigeria’s currency challenges, exacerbated by fiscal imbalances and investor uncertainty.
However, analysts were cautiously optimistic about future stability in the currency market, driven in part by the federal government’s recent policy interventions and OPEC’s efforts to maintain stable crude oil prices.
Energy market expert, Bode Olumide, noted, “The recent stability in global oil prices, thanks to OPEC’s policy maneuvers, should provide some cushion for the naira in the near term. A steep decline in oil prices would have aggravated Nigeria’s fiscal woes, further weakening the currency. As long as crude prices remain within a reasonable range, it provides a backstop against further naira depreciation.”
Financial analyst Ifeoma Adeyemi commented, “The government’s tax reliefs and VAT exemptions could stimulate increased investment in Nigeria’s offshore oil and gas projects.
“This could help boost production and export volumes, ultimately providing additional foreign currency inflows, which would be crucial in supporting the naira’s recovery. However, the impact of these external reserves saw a modest increase, rising from $36.305 billion in August to $36.730 measures will only be felt over time, and in the interim, market volatility is likely to persist.