Naira Depreciates Again Despite Surge in Nigeria’s External Reserves

The naira has resumed its depreciation against the dollar in the foreign exchange market despite an increase in Nigeria’s external reserves.

According to FMDQ data, the naira weakened to N1523.85 against the dollar on Monday, down from N1509.67 traded last Friday. This marks a loss of N14.18 compared to Friday’s rate.

Similarly, in the parallel market, the naira depreciated to N1530 per dollar on Monday from N1525 on Friday.

This depreciation occurred despite the rise in Nigeria’s external reserves to $34.66 billion as of July 4, 2024.

Additionally, FMDQ data showed that FX transaction turnover increased to $133.46 million on Monday, up from $116.88 million last Friday.

The naira’s decline in the forex market continues to negatively impact Nigeria’s economy, further exacerbated by rising food prices. The country’s food inflation stood at 40.66 percent in May 2024.