US Dollar strengthens against the Naira, reaches highest rate at N855 per $1
The US Dollar has seen a significant surge against the Nigerian Naira, reaching its highest rate at N855 per $1. This increase represents a 1.82% rise in the value of the dollar compared to the previous trading day. The FMDQ Exchange reported that the dollar’s price was raised by N14.22 kobo, contributing to this jump in the exchange rate.
According to data obtained from FMDQ, the closing rate for the US Dollar was N792.04/$1, surpassing the N777.82/$1 rate from the previous trading session. Both currencies traded within the range of N855/$1, marking the highest rate of the day, while also touching a low of N650/$1.
The total value of foreign exchange traded by authorized dealers and their clients at the end of trading was $49.46 million. This indicates a 36.58% drop compared to the previous trading day, where forex worth $77.99 million was transacted.
The black market average rate for the naira to pound saw an increase, reaching N1103.9/£1, which is N29 higher than the previous rate of N1074.9/£1.
Similarly, the naira to euro rate also moved upwards, rising from N929.56/€1 to N952.5/€1. This represents a N22.94 kobo increase in the cost of the European currency.
This fluctuation in exchange rates highlights the volatility of the Nigerian currency against major foreign currencies. It also reflects the economic challenges faced by the country, including inflation, dwindling foreign reserves, and reduced oil prices. These factors contribute to the increased demand for foreign currencies, particularly the US Dollar, and consequent depreciation of the Naira.
It is important to note that while the US Dollar has strengthened against the Naira, these exchange rate fluctuations have varying impacts on different sectors of the economy. Importers and individuals who rely heavily on foreign imports will likely face higher costs due to the devaluation of the Naira. Conversely, exporters may benefit from increased export earnings.
Furthermore, the rising exchange rate has implications for inflationary pressures in the economy, as imported goods become more expensive. This could potentially affect the purchasing power of consumers and contribute to an overall rise in prices.
The Central Bank of Nigeria (CBN) plays a crucial role in managing foreign exchange to stabilize the Naira. They implement various measures to control the demand and supply of foreign currencies, including interventions in the foreign exchange market and the utilization of different exchange rate windows.
In conclusion, the US Dollar has experienced a significant surge against the Naira, reaching its highest rate at N855 per $1. This demonstrates the ongoing challenges faced by the Nigerian economy and highlights the need for effective policies to stabilize the exchange rate and mitigate the impact on various sectors.
