Good News: CBN Efforts Working As Naira’s Value Rises by 1.8% As Forex Supply Increases
- The Nigerian currency exchange rate recorded improved performance on the last day of the previous week
- After falling to a record low, the Nigerian currency ended the week stronger against the US dollar
- In the last few days, the CBN has introduced several policies to boost forex supply, and it appears to be working
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Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and the Economy.
The Naira closed on a strong note against the United States in the official foreign exchange market last week.
Data from FMDQ securities showed that on Friday, February 2, 2024, the naira closed N1,4535/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM) segment of the foreign exchange (FX).
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This represents a 1.8% or N57.54 appreciation when compared with the preceding day’s value of N1,461.90/$1.
The improvement of the naira comes following efforts by the Central Bank of Nigeria (CBN) to boost liquidity.
At the close of trading on Friday, It was observed that the supply of forex improved by $284.27 or 182.4 per cent to $440.13 million from $155.86 million.
Naira vs Pound, Euro
However, the Naira depreciated against the Pound Sterling in the official market during the session by N64.12 to settle at N1,790.71/£1 versus Thursday’s closing price of N1,726.59/£1.
While against the Euro, the naira depreciated by N55.31 to trade at N1,530.65/€1, in contrast to the preceding session’s N1,475.34/€1.
Naira to dollar at unofficial market
It was however a different story for the naira in the two unofficial windows of the foreign exchange market as it depreciated again.
Market Survey carried out by Legit.ng on Sunday, February 4, 2024, show that the Naira exchanged against the dollar in the black market at N1,445 compared to N1,410/$1 it closed on Friday last week.
A Bureau de Change operator at Airport Road, Abdullahi Musa, told Legit.ng that despite the improved liquidity in the official market, more Nigerians looking to travel are still ready to pay any amount at the black market.
"We are still in business; you see, there are customers coming, most of them are looking to travel and are ready to pay as high as 1,500 to buy one dollar.
"It will take time before the dollar is exchanged at N1,200, but I can assure you that at least this year, it will never fall below N1,000."
A look at the Peer-to-Peer (P2P) forex window, most used by crypto traders and fintech, shows that the value of the Nigerian currency also slumped against the US Dollar on Sunday, quoting at 1,431.1/$ compared to Friday's rate of N1,409/$1.
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
