Free Fall For Naira As It Racks Up Losses Against Dollar

Free Fall For Naira As It Racks Up Losses Against Dollar
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Tumultous conditions on Wednesday has seen the Nigerian Naira crashing and depreciating at the Investors and Exporters window, exchanging at ₦418.75 to the dollar, a 0.12 per cent depreciation, which was weaker than ₦418.25 traded on Tuesday.

After this crash, the open indicative rate closed at ₦417.70 to the dollar on Wednesday.

An exchange rate of ₦444.00 to the dollar was the highest rate recorded within the day’s trading before it settled at ₦418.75. The Naira also sold for as low as 410 to the dollar within the day’s trading.

A total of 115.78 million dollars was traded in foreign exchange at the official Investors and Exporters window on Wednesday.

Read Also: US Dollar Soars As Nigerian Naira Crashes, Closes At 419

Meanwhile, Prof. Ndubisi Nwokoma, Professor of Financial Economics and Director of the Centre for Economic Policy Analysis and Research of the University of Lagos, attributed the currency’s loss to a shortfall in reserve.

Nwokoma said: “this is a clear case of uncertainty in the foreign exchange market and in the economy at large.

“A development where we see fluctuating prices on a daily basis in the official foreign exchange market indicates shortfalls in reserves (supply), as well as bottlenecks in the supply chain coupled with speculative activities on the demand side,’’ he said.

In a related development, Bullish sentiment returned to the Nigerian stock market on Wednesday, following investors’ interest in MTN Nigeria.

Specifically, the market capitalization garnered ₦556.93 billion or 1.99 per cent to close at ₦28.735 trillion from ₦27.928 trillion on Tuesday.

Also, the All-Share Index advanced by 1,033.04 points or 1.99 percent to close at 52,838.45 against 51,805.41 achieved on Tuesday.

Accordingly, the year-to-date returns increased to 23.70 per cent.

The upturn was impacted by gains recorded in the other sectors, including ARDOVA, Dangote, Cement, Cadbury, Guaranty Trust Holding Company (GTCo).

Sectoral performance was positive as most indices gained.

Africa Daily News, New York

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