NAIRA WEAKENS TO N1,234/$ AT OFFICIAL MARKET

Key Points:

  • Nigerian Naira (NGN) depreciated to N1,234 per USD on Monday at the official foreign exchange market.
  • This represents a 5.26% decline (N65) from Friday’s rate (N1,169.99).
  • The weakening coincides with CBN Governor Yemi Cardoso’s recent statement prioritizing reserve protection over defending the Naira.

Market Fluctuations and CBN Policy Shift

  • Earlier optimism of the Naira trading below N1,000 per USD has reversed.
  • Nigeria’s external reserves have been dropping, reaching a new low of $32.1 billion on April 18th, 2024.
  • Governor Cardoso, at the IMF/World Bank Spring Meetings, emphasized a policy shift:
    • The CBN will not actively intervene to maintain the Naira exchange rate.
    • Recent reserve decline is not related to Naira defense.

Background:

  • The Naira previously experienced significant depreciation (reaching N1,950 per USD) in the weeks leading to a government crackdown on cryptocurrency exchange Binance.

Uncertainties:

  • The impact of the CBN’s new policy on the Naira’s long-term stability remains unclear.
  • Whether this depreciation is a temporary correction or a sustained trend is yet to be seen.

https://statisticss.com/2024/04/25/naira-weakens-to…-official-market/

Source: Techeconomy

 

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