Naira Gains Over N800 Against the British Pound as CBN Sells Dollar to BDCs at New Rates
- The naira has gained over N800 against the British pound in the last four weeks since CBN began its series of policies
- The Nigerian currency also continued its pushback against the US dollar in the official and black markets
- The naira moved from a low of N1,600 in the official market and N1,917 in the black market to N1,255 and N1,250, respectively
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, regained most of its losses against the British Pound in 2024 at the parallel market as economic inflows grew.
On Thursday, April 4, 2024, the naira settled at N1,593 per pound, showing a gain of N821 from February 24, 2024, from N2,414 per pound against the pound.
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The naira continues to recover against the dollar
On Thursday, April 4, 2024, the pound continued to trade above its one-week high of 1.2660 against the US dollar, according to data from NAFEM
However, the Nigerian currency strengthened further on Thursday, April 24, 2024, against the US dollar by 0.62% as traders quoted the dollar at N1,255.07 in the official market, as against the N1,262.85 recorded on Wednesday, April 3, 2024.
Since the beginning of March 2024, the naira has continued to appreciate against major currencies, especially against the US greenback, rising from N1,612 in the official market in February to the current rate.
In the parallel end of the foreign exchange market, the naira has regained over N600 against the US dollar, trading at N1,250 from the almost N2,000 it traded at the beginning of February.
Currency dealers witness improved liquidity
According to reports, currency dealers say the excellent performance of the naira is due to a reduction in speculation as foreign forex hoarders, hit by CBN policies, offload their stash.
Analysts believe the CBN's payment of all verified FX backlogs is responsible for the massive recovery of the naira and market liquidity.
The naira has defied Goldman Sachs's and the Economist Intelligence Unit's (EIU) predictions of further depreciation. The EIU said that the Nigerian currency would continue to fall and finally plateau at about N2,000 per dollar in 2024.
Analysts praise CBN's actions
Economist and banker Emeka Umejei said that CBN’s intentional moves controlled the fall of the naira.
He stated that the apex bank's various circulars and policies helped to a large degree in stabilising the local currency.
“For instance, the recall of currency dealers into the mainstream forex trading by CBN cannot be overlooked. The dealers also helped stabilise the naira.
“Also, the CBN's subtle intervention in selling Forex to BDCs is another contributory factor to the naira’s recovery. In the past, these guys were neglected, leading to FX scarcity as they traded mostly in the black market,” he said.
Naira gains as CBN quotes new rate to sell dollars to BDCs
Legit.ng reported that Bureau de Change (BDC) operators have explained the rationale behind the consistent rise in the local currency.
They attributed this to the cheap dollar members get from the Central Bank of Nigeria.
This occurred as the naira continued its upward trend against the US dollar on Wednesday, strengthening at both the official foreign exchange and black market markets.
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Source: Legit.ng
