Dollar To Naira Official Exchange Rate Surges To All-Time High In May

The dollar-to-naira official exchange rate experienced the worst setback in May as the exchange rate surged to a new all-time high, N1,533.99.

BrandNewsDay reports that the exchange rate between the U.S. Dollar to Naira in the official NAFEM Window has depreciated to N1,533.99/$1 on Thursday, May 16, 2024.

This represents a massive 4.89% drop in one day when compared to the N1459.02/$1 recorded a day earlier.

The exchange rate snapped one week of loss to close stronger on Wednesday. However, it appears that was a blip with the rate falling to the lowest this month.

The trading dynamics on Thursday further underscore the erratic nature of the market. During intra-day trading, the exchange rate peaked at an intra-day high of N1,590/$1, highlighting a temporary surge in dollar sales.

Contrarily, the intra-day low dropped to N1,399.20/$1, reflecting periods of heightened buying pressure on the naira.

The sharp movements within a single trading day suggest heightened uncertainty and instability, making it challenging for businesses and investors to plan their financial activities.

Recalled that in February 2024, the National Security Adviser’s Office, led by Nuhu Ribadu, in collaboration with the CBN, initiated a joint effort to combat forex speculation and tackle the issues affecting the country’s economic stability.

The collaboration was set to include coordinated actions with leading law enforcement agencies such as the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service (NCS), and the Nigeria Financial Intelligence Unit (NFIU).

This depreciation followed a notable shift in forex turnover. On Wednesday, forex turnover surged by an impressive 124.56% to reach $289.14 million. However, by Thursday, turnover had fallen marginally by 5.63% to $272.86 million. This squeeze in forex liquidity likely contributed to the naira’s sharp decline in value on the official market.

In response to the ongoing volatility, the Central Bank of Nigeria (CBN) introduced certain reforms while hunting down speculators.