Tony Chukwunyem 
After seemingly achieving some sort of stability against the dollar in the parallel market in recent weeks, the naira, Tuesday, weakened significantly against the greenback as its street value declined 1.5 per cent to N1,305 per dollar, compared with a day earlier, according to forex dealers. The dealers attributed the local currency’s slump to a steady rise in dollar demand since the start of the year. With businesses wanting forex to restock goods or import their raw materials and individuals needing dollars for studies abroad, demand for the already scarce greenback has surged in the last fortnight, dealers said.
While prior to the start of this week, the naira has been trading flat in the parallel market where it exchanged at between N1,200 and N1,280 per dollar, the local currency kicked off the new year on a weaker note in the official market-the Investors and Exporters’ (I&E) window- as it weakened to N1,035.12/$1 on January 3. Although it appreciated to N869.013/$1 in the official market on January 5, it generally headed south in that segment of the forex market last week, falling to N1,082.32/$1 on January 10. On Tuesday, January 16, the naira closed weaker at N878.57/$1 in the official market compared with N838.95 per dollar on the previous day, according to FMDQ data. In an emailed note on Tuesday, investment bank, Chapel Hill Denham, said dollar liquidity at the official market declined by 69 per cent on Monday to $26.37 million.
New Telegraph reports that naira volatility in the official market has not abated despite the Central Bank of Nigeria’s (CBN) announcement on January 8 that it had paid nearly $2 billion in outstanding foreign exchange forwards in the last three months as part of efforts to clear an estimated $7 billion backlog in forex forwards that have matured. On December 29, the Federal Government announced that it had received a $2.25 billion foreign exchange support facility from the African ImportExport Bank (Afrexim). The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who disclosed this, said that the amount was the first tranche of the $3.3 billion crude oil prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPCL). He noted that the loan was aimed at resolving the acute FX shortage that has negatively affected the economy.
Edun had also disclosed that the balance of $1.05 billion would be received in the first week of January. In his presentation at the First Bank of Nigeria Limited’s Nigeria Economic Outlook 2024, in Lagos last Friday, the Founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult), Dr. ‘Biodun Adedipe, stated that his firm was expecting, “ average official rate at N900/$1 and parallel market average of N1,235/$1” for 2024.
