On Wednesday, October 30, 2024, the Nigerian naira slightly lost value compared to the United States dollar in the official foreign exchange market. Data from the Nigerian Autonomous Foreign Exchange Market shows that the naira was exchanged at N1,631.17 for each US dollar.
This change happened as the US dollar index showed signs of getting stronger after a drop on Wednesday. The dollar index, which compares the US dollar to a group of six other currencies, increased by 0.15% to 104.02.
The naira’s decrease in value is linked to challenges in Nigeria’s foreign exchange market, caused by a large amount of money in circulation and the government’s budget deficit. Recent information from the Central Bank of Nigeria (CBN) shows that the country’s money supply (M3) reached N109 trillion in September 2024, which is a 62.8% increase from N66.94 trillion in September 2023.
To reduce foreign exchange risks and encourage more loans in Nigerian currency for local businesses, the Central Bank of Nigeria (CBN) and the International Finance Corporation (IFC) have agreed to work together. The IFC plans to greatly increase its investments in Nigeria, aiming for over $1 billion in the next few years.
The IFC’s investments will concentrate on important areas such as small and medium-sized businesses, creative industries, infrastructure, housing, agriculture, and energy, with a focus on using local currency for financing.
At the same time, global currency markets are being careful before the upcoming Nonfarm Payrolls (NFP) report on Friday, which is expected to give more information about the labor market’s health.
