No More N1,500/$: Naira Bounces Back, Rises by Over N160 Against US Dollar in Hours
- The Nigerian currency exchange rate improved against the dollar in the early hours of Thursday
- It is also good news for the Naira at the Nigerian Autonomous Foreign Exchange Market (NAFEM)
- Naira's strong performance comes after hitting a record low at both the official and unofficial exchange market
Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and the Economy.
The Naira has started the new month strong, leaving speculators hoarding the dollar to count their losses.
In the early hours of Thursday, February 1, 2024, the Naira appreciated by N165.2 or 12.17% against the US dollar in the Peer to Peer market(P2P).
Source: Getty Images
A peer-to-peer (P2P) platform is a digital platform that connects buyers and sellers directly, enabling them to buy and sell dollars. Fintechs mostly utilize this platform.
Naira bounces back
Checks by Legit.ng show that the Naira exchange rate, which began the day at N1,520/$, is trading at N1355/$ as of the time of this report.
It was a similar scenario at the black market traders now sell one dollar at N1,440 compared to N1,520 reported on Wednesday, January 31, 2024.
In the official market, FMDQ securities reported that on Wednesday, January 31, the Naira appreciated against the US dollar in the NAFEM window.
The Naira was sold for N1,455.59 per Dollar at the official market on Wednesday compared with Tuesday's exchange rate of N1,482.57/$1, indicating an appreciation of 1.8 per cent or N26.98.
CBN gives instructions to banks
The appreciation of the Naira comes after the Central Bank of Nigeria (CBN) released a circular titled 'Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks' on Wednesday, January 31, 2024.
The circular is a move to prevent banks from hoarding foreign exchange (FX) and to stabilize the market, which has been under pressure lately.
CBN also cautioned banks against stockpiling foreign currencies solely for profit, an act the viewed as contributing to the fluctuations in exchange rates.
The apex bank has therefore instructed banks to sell off their excess dollar reserves within 24 hours, Punch reports.
A source at CBN was quoted saying:
"We’ve observed that some banks are holding onto substantial foreign exchange reserves for extended periods to capitalize on exchange rate fluctuations."
FG addresses Naira to dollar exchange rate
Legit.ng earlier reported that Ben Akabueze, the director-general of the federation's budget office, said the Naira would strengthen in value in the foreign exchange market in 2024.
Speaking in an interview with Channels TV on Tuesday, December 26, 2023, Akabueze said this would be possible as the country expects an increase in dollar supply.
He noted that the Tinubu-led government expects the reforms initiated in 2023 to start yielding results in 2024, which is why it maintains a positive stance on the exchange rate.
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Source: Legit.ng
