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In the ever-changing landscape of Nigeria's foreign exchange markets, the exchange rate for the dollar to naira experienced fluctuations in various sectors on Monday. Notably, the physical black market recorded a rate of N1,280/US$ compared to N1,260 against the greenback the previous week.
Contrastingly, at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the local currency demonstrated resilience by making gains against the dollar. It closed at N838.95 to the dollar on Monday, showing a positive shift from the N890.54/US$ rate observed last Friday.
The week witnessed persistent volatility in exchange rates, with a weekly low of N1,089.51/US$1 recorded on Tuesday and a weekly high of N856.57/US$1 on Monday.
In the Peer-to-Peer (P2P) market, an unofficial platform actively utilized by crypto traders, retail investors, and speculators, the naira experienced trading at approximately N1,272/$ in the early hours of Monday, reflecting a slight increase from the weekend's rate of N1,255/$.
Despite these market dynamics, data published by the Central Bank of Nigeria (CBN) indicates a decrease in the country's gross official reserves. In December 2023, the reserves dropped by US$91.6 million, reaching USD32.9 billion. This decline suggests a cumulative reduction of approximately US$4.2 billion in 2023, with an average monthly depletion rate of -USD348 million. The data highlights ongoing challenges in maintaining robust external reserves amid economic uncertainties.
