Investor confidence is impacted by the Naira’s volatility versus the US dollar, which keeps sending shockwaves of uncertainty through Nigeria’s economy.
The country’s currency appreciated against the dollar last week, providing a brief reprieve. On the parallel market, it was trading at N970/$1 as opposed to N1300/$1 the week before.
The naira, however, had a poor start to the week, with Monday’s exchange rates ranging from N1000 to N1020/$1. This indicates a minor decline from the N970/$1 exchange rate during the previous weekend.
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In a similar vein, the Naira fell 4.24 percent at the official FMDQ market, from N780.03/$1 on Friday to N809.02/$1.
Nigeria’s foreign exchange reserves, meanwhile, rose from $33,240 million in September 2023 to $33,340 million in October.
According to DAILY POST, industry participants are concerned about the Naira’s ongoing volatility since the Central Bank of Nigeria floated the currency on the foreign exchange market on June 14.
In an interview with Channels Television on Monday, financial expert Kalu Aja shared his thoughts, saying that he didn’t think the Naira could stay stable for very long.
“Sales of crude oil are the only factor that determines the strength of the Naira. The currency will continue to fluctuate unless significant exports of crude oil are witnessed.
Aja’s position is supported by the fact that, according to the National Bureau of Statistics, Nigeria’s sales of crude oil increased to N5.14 trillion in the first three months of 2023 from N4.9 trillion the previous quarter.