Naira To Dollar Exchange Rate Unstable At NFEM

The Naira to Dollar exchange rate still remains unstable at the Nigerian Foreign Exchange Market (NFEM) days on.

With a 3.5 per cent appreciation at one instance and 35.53’fall at another, planning on Naira-denominated projects and products has remained dicey for investors.

This is amidst a worrisome inflationary period that has seen domestic and industrial goods quadruple in cost but depreciative in utility.

As it is, only those selling Nigerian products and services at dollarised markets appear to have an upper hand, but the seeming advantage diminishes as they enter the market – prices hitting the rooftops.

Comparatively, one Dollar exchanged for approximately N1, 400 in the first quarter of of 2024, but has seen an exchange rate value appreciation as at beginning of the week

At the Nigerian Autonomous Foreign Exchange Market (NAFEM), midweek, the naira gained 3.12 per cent to the dollar, exchanging at N1, 543.84 compared to N1,592.06 on Tuesday and N1,579.22 on Monday.

Meanwhile, The Eagle reports that Business sentiment across most broad sectors were pessimistic in the reporting month of July but with projected improvements in August.

The July 2024 Business Expectations Survey (BES) was carried out between the period of

July 15-19, 2024, by the Central Bank of Nigeria (CBN)

The indices of the Industrial, Agriculture, and Services Sectors stood at -1.0, 1.0, and -0.3 points respectively.

For the subsectors of Mining, Quarrying; Electricity, Gas & Water Supply, and Market Services, the indices stood at 17.6 and 0.9 points respectively. The Construction, Non-Market, and

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Manufacturing Sectors were however pessimistic at –5.6. -3.4 and -1.5 points respectively.

• The respondent firms opined that insecurity was the major factor constraining the business activity in July 2024. Other constraining factors are high interest rate, insufficient power supply, and high/multiple taxes.
• Respondent firms expect the exchange rate to depreciate in all review periods except the next six months. However, they expect the borrowing rate to rise in all the periods under review. Respondents also opined that the current inflation rate of 34.19 is too high.

Operators are of the view that the Naira to Dollar exchange rate would read positive regularly once other fiscal policy fundamentals are taken care of.

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