No More N1K/$: Naira’s New Exchange Rate to Dollar in All FX Markets Shows CBN’s Solution Working

No More N1K/$: Naira’s New Exchange Rate to Dollar in All FX Markets Shows CBN’s Solution Working

  • Naira ended the week with a strong performance against the US dollar at the foreign exchange markets
  • The development is linked to the report that the CBN has started the payment of matured foreign exchange forwards owed to banks
  • Experts expect the naira to continue its good performance in the coming days ahead

Dave Ibemere has over a decade of experience covering Business and the Economy.

Nigerian currency has closed the first trading week of November 2023 positive against the US dollar at all the foreign exchange markets.

At the official FX window known as the Nigerian Foreign Exchange Market (NAFEM), the naira closed at N776.14/$ on Friday, November 3, 2023.

naira to dollar exchange rate
The naira closed the week stronger against the US dollar. Photo credit: Tom Saater
Source: Getty Images

This represents a 2.2% or N17.14 increase in the value of the naira against the dollar compared to the closing rate of N793.28/$1 on Thursday, November 2, 2023.

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Data from FMDQ securities showed that the naira improved despite a drop in FX turnover to $98.82 million, lower than the $136.11 million achieved the previous day.

The good performance of the naira follows the news that the Central Bank of Nigeria (CBN) had begun to clear some of its foreign exchange backlogs.

Citibank, Stanbic IBTC, and Standard Chartered are some international banks that have received payments.

Naira to dollar at the unofficial markets

This development also helped the naira in the black market and the Peer-to-peer segment, which is mainly used by fintechs.

Checks by Legit.ng show that in the P2P segment, the naira strengthened by 8.4 per cent to N892 against the US dollar on Friday.

While in the black market, the naira appreciated by N160 to close at N940/$1 on Friday, compared to the previous day's value of N1,140/$.

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Naira appreciates in official market as CBN confirms highest dollar inflow in 19 months

Similarly, CBN data showed that the naira improved against the Pound Sterling by N16.99 to settle at N966.43/£1, improving from Thursday's rate of N983.42/£1.

It was also good news for the naira against the Euro as it gained N19.06 to finish at N839.39/€1, compared to N858.45/€1.

Expert speaks on the impact.

Reacting to the recent development of Naira, Kelvin Emmanuel, the CEO of Diaryhills and financial expert, said that stability will attract foreign investors back into Nigeria.

"Going forward, I believe the CBN needs to amend the Foreign Exchange Act and reduce the strict control over the flow of FX to primary dealers, such as banks in Nigeria. This would open the market to include not only remittance companies but also other players.
"This change would mean that money wouldn't only flow through banks but also through all licensed International Money Transfer Operators (IMTOs) and other entities regulated by the CBN. This would promote fluidity in the movement of forex, especially in the case of remittances."

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Tinubu's govt sets 'fair' naira to dollar exchange rate target by December 2023

In a previous report by Legit.ng, Tinubu set an exchange rate target for naira before the end of 2023.

The federal government believes that the several reforms introduced will ease the pressure.

Source: Legit.ng

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