The Nigerian currency depreciated slightly in the official market, while the US dollar index showed some recovery following Wednesday’s sell-off.

The value of the Naira fell slightly against the US Dollar on Wednesday, October 30, 2024 at the official foreign exchange market.

The Nigerian Autonomous Foreign Exchange Market reported that the local currency was worth N1,631.17/$1 at the official window.

Nigeria’s currencies are under pressure due to a high money supply and a high budget deficit.

Nigeria’s money supply, often known as M3, reached N109 trillion in September 2024, according to CBN data, M3 grew by 62.8% annually from N66.94 trillion in September 2023.

The CBN and the International Finance Corporation (IFC) have signed an agreement to reduce foreign exchange risks and increase local currency loans to Nigerian businesses, the IFC said in a statement on Monday.

The IFC, a member of the World Bank Group, intends to significantly increase its financing to Nigeria, with a target of more than $1 billion over the coming years, the statement said.

IFC will manage foreign exchange risks and increase its naira investments in small and medium enterprises, creative industry, infrastructure, housing, agriculture and energy.

“Many of these sectors require local currency financing, and IFC’s partnership with the central bank is a critical tool for expanding access to this financing. » the statement said.

US Dollar Shows Recovery During Thursday Trading Session

The dollar index rebounded again after falling last night in response to mixed US reports.

The U.S. Dollar Index (DXY), which measures the value of the dollar against a basket of six other currencies, fell after the release of conflicting economic data on Wednesday. The market reacted to the ADP report on employment developments from September to October, but a negative revision to GDP growth in the third quarter caused the dollar to fall.

U.S. ADP employment change outperformed expectations in October with an increase of 233,000, which should reduce dollar losses. U.S. GDP in the third quarter grew at a rate of 2.8%, better than its global peers but less than the market had expected.

Investors remain tense ahead of Friday’s Nonfarm Payrolls (NFP) report, which could shed additional light on labor market fundamentals. After falling below the 104-point level the day before, the dollar index, which measures the U.S. dollar against a basket of foreign currencies, is now up 0.15% at 104.02.

Two of the currencies in the basket, the euro and the pound sterling, fell almost 0.2% to $1.0871 and $1.2953, respectively.

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