Over the course of the past week, the Nigerian naira experienced three notable depreciations against the US dollar within the foreign exchange market. According to data from FMDQ, the naira’s value declined to N1,169.99 per dollar on Friday, down from N1,154.08 on Thursday, marking a significant loss of N15.91 compared to the previous day’s trading. The first depreciation occurred on Tuesday, ending a period of sustained stability, followed by another downturn on Thursday where the naira lost N81 against the dollar.
Governor Olayemi Cardoso of the Central Bank of Nigeria has emphasized the importance of maintaining liquidity in the foreign exchange market to sustain the naira’s appreciation. However, while analysts have attributed the recent depreciation to the depletion of Nigeria’s foreign reserves, Cardoso has pointed to foreign loan repayment as the underlying cause.
As of April 15, Nigeria’s foreign exchange reserves stood at $32.29 billion, reflecting a significant decrease. This situation underscores the importance of carefully managing the country’s foreign currency reserves and implementing strategies to ensure stability within the foreign exchange market.
