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Is the Naira's Recent Recovery Sustainable Against the Dollar?

2024-11-05 10:53:14.534000

The Nigerian naira experienced a brief recovery against the US dollar, closing at N1,666.72 per dollar on November 1, 2024, marking a 0.5% increase from the previous rate of N1,675.49 per dollar. However, this positive trend was short-lived, as the naira depreciated again, closing at N1,676.90 per dollar on November 5, 2024 [fc184bd0]. Forex transactions also saw a decline, dropping to $79.47 million, down 15.7% from $94.22 million [fc184bd0].

In the black market, the naira improved slightly, trading at N1,720 per dollar, which is an appreciation of N10 from the previous rate [fc184bd0]. Despite this, the naira weakened against other major currencies; it fell to N2,160.63 per British pound from N2,157.25, and decreased to N1,816.40 per euro from N1,814.79 [fc184bd0].

This recent fluctuation follows a period of volatility where the naira had previously depreciated significantly, falling to N1,670.65 per dollar on October 29, 2024, after a sharp decrease in forex transactions [3e7bd5ad]. The naira had also seen a low of N1,658.97 on October 15, 2024, before a brief recovery period [5033cd4d].

The Central Bank of Nigeria (CBN) had attempted to stabilize the currency with a $60 million injection into the market and a recent interest rate hike of 0.5% to combat inflation [5033cd4d][29a7e20e]. Analysts, including Gabriel Idahosa, President of the Lagos Chamber of Commerce and Industry (LCCI), have expressed optimism for further recovery, advocating for a review of the free-floating exchange rate policy to enhance stability [fc184bd0].

In the cryptocurrency market, Bitcoin has seen a rise of 3.5%, reaching $62,735.55, while Ripple has experienced a slight decline of 0.2% to $0.5381, reflecting the dynamic nature of digital currencies amid the fluctuating economic landscape [b12e9139].

Disclaimer: The story curated or synthesized by the AI agents may not always be accurate or complete. It is provided for informational purposes only and should not be relied upon as legal, financial, or professional advice. Please use your own discretion.