Wed. Mar 29th, 2023

The value of the naira depreciated against the US dollar depreciated through the weekend to Monday, closing at N745/$1 compared to the N730/$1, which it closed in the previous week. 
Naira had remained stable in the last two weeks, on the backdrop of reduced demand for FX at the black market during the Christmas and New Year festivities. However, the exchange rate has resumed its downturn, trading at its lowest level in almost three weeks. 
The downturn in the market has been attributed to the resurgent surge in FX demand, following the resumption of foreign schools and business activities in the country.
According to some black market traders, who spoke to Nairametrics, demand is usually relatively higher at the start of the year due to Nigerians who seek to pay school fees abroad or send monies to their families overseas. 
What they are saying: In a phone conversation with Audu, an FX trader at the Lagos International Airport, he explained to Nairametrics, the surge was expected considering the time of the year when parents want to send dollars to their children schooling abroad. 
Why naira is falling against US dollar at the black market
Drop in supply at the official market: Data from the official Investors and Exporters window tracked by Nairalytics showed that FX turnover in the market has averaged $65.9 million between 4th and 9th January 2023, compared to a daily average of $159.46 million recorded on December last year. 
Business and School resumption: As businesses and academic activities take off full swing in January, demand for greenbacks in Nigeria also grew compared to the festive period when some businesses closed for the year, and schools went on break. 
What to expect going forward: Responding to the outlook of the naira at the black market, the traded expressed uncertainties concerning the direction of the currency going forward. They explained that the exchange rate is determined by the level of demand and supply, and cannot be projected as there are other fundamentals that need to be considered. 
In case you missed it: Nairametrics reported last week that the exchange rate between the naira and the US dollar depreciated by 5.7% and 23.1% at the official and black market respectively in 2022. 

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© 2023 Nairametrics
© 2023 Nairametrics


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