Naira Gains in All Markets as FX Supply Exceeds Half a Billion Dollar in Official Window in One Day
- The Nigerian currency, the naira, appreciated by 0.97% in the official foreign exchange market on Thursday, November 28, 2024
- The dollar traded at N1,644.83 per dollar as against the N1,660 it closed the previous day
- The naira’s gain came amid a 646.24%, hitting a $560.34 million rise in forex liquidity in the official forex market
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The naira appreciated in the official window by 0.97% on Thursday, November 28, 2024, as traders quoted the dollar at N1,644.86 relative to N1,660.83 traded on Wednesday, November 27, 2024.
The official foreign exchange market experienced an increase in FX supply, rising by 66.24% to $560.34 million on Thursday, November 28, 2024, as against the $337.07 million recorded the previous day.
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Naira appreciates in parallel markets
Data from the FMDQ Exchange shows that willing buyers and willing sellers quoted the dollar at a high of N1,701 per dollar and a low of N1,557, showing a spot rate difference of N155.
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The naira also appreciated in the parallel segment of the foreign exchange market, closing at N1,740 per dollar, up from N1,750 it traded the day before.
Analysts laud increased dollar supply
Analysts believe that the rise in forex liquidity in the FX market on Thursday indicates increased confidence in the forex markets.
They say that hitting over $500 million in liquidity was the icebreaker for the local currency, which has suffered a 70% depreciation in 2024.
Kingsley Onome, an economist and forex trader, stated that the vast FX supply is a surprise because this is the season that traders usually hoard hard currencies due to the yuletide.
“Usually, at this time of the year, there are always FX lags in the market due to hoarding caused by intense shopping and other reasons. However, the supply on Thursday is a surprise and probably the highest this year,” he said.
Janet Ogochukwu, senior banker and economist, expressed optimism over the increased liquidity, stating that the move will stabilise the naira.
“The rise in FX liquidity differs from the interventions we ask the CBN to make in the forex markets. However, the move shows an increasing confidence in the market,” she said.
FX reserves hit $40.88 billion
Legit.ng earlier reported that the Central Bank of Nigeria's (CBN) governor, Olayemi Cardoso, reports that as of November 21, the nation's foreign reserves had increased to $40.88 billion.
Cardoso gave remarks at a press conference on Tuesday, November 27, 2024, following Abuja's 298th monetary policy committee meeting.
According to him, the external reserves increased to $40.88 billion in November from $40.06 billion at the end of October.
Naira finally recovered against the dollar
Legit.ng earlier reported that the Nigerian naira bounced back on Thursday, November 21, 2024, after days of depreciation in the official and parallel windows.
The naira gained 1.71% to close at N1,658.67 per dollar from N1,678.92 recorded on Wednesday, November 20, 2024.
The naira’s recovery comes after several days of depreciation, in which it hit its lowest value against the dollar at N1,689 per dollar on Monday, November 18, 2024.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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