October 17, (THEWILL) – In an unprecedented turn of events, the Naira tumbled to its deepest place on Tuesday to settle at N848.12/$ at the investors’ and exporters’ (I&E) window.
This is an 8.9% depreciation compared with the N778.80/$ it closed on the previous day.
It also represents a whopping 80% depreciation at the I&E window against N472/$ the local currency had traded on June 13, 2023 before the radical forex reform of June 14, which marked the set-off to the current angry deep.
The Naira had traded N768/$ at the parallel marked on June 13, preceding the devaluation process on the next day.
Checks by THEWILL showed that street currency dealers sold N1,040 to N1,049/$ on Tuesday in different parts of Lagos.
Activity volume of $234.28 million recorded on Tuesday was 221 percent against $43.09 in the previous day’s trading.
In a striking turn of events, the Naira which had opened the day’s trading with N758.50 witnessed a peak spot rate of N981, before settling at N848.62.
This suggests a touch of CBN’s ‘soft’ intervention notwithstanding the increased dollar supply on Tuesday
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The CBN had declared last week that it would operate a “managed float” regime but would intervene when necessary.
Tuesday’s performance points to the apex bank’s deliberate act of allowing a free float of the Naira to a level it considers capable of erasing the wide gap between the official and parallel markets.
This will inch towards the much-intended single segment regime of the forex market.
Analysts, however, maintain that no significant gains would be achieved without addressing the challenge of lack of adequate, sustainable supply stream.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.