Economy Featured News Nigeria

Nigeria’s Naira Continues Recovery Against Dollar at Official, Parallel Markets

The Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window, has shown that the naira, on Friday, continued its recovery against the United States dollar.
The naira recovered to N794.89/$1, after a two-day slump in the official market.

According to data from the FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the rate represents a recovery of 16.88% from the N956.33 it recorded on Thursday.

According to The Nation, the Forex turnover, which represents the amount of dollars traded at a particular trading day, hit $105.50million, quoting data from NAFEM.

Consequently, at the parallel market, the naira sustained its appreciation against the dollar as it appreciated on Friday, from N1,160 to N1,155.

A Bureau De Change (BDC), operator at Ikeja, Jamiu Abdullahi, said dollar sells for N1,125 at the black market while manufacturers buy at N1140.

He, however, said there is possibility of the naira gaining strength against the naira in coming weeks.
It could be recalled that the naira had steadied in the parallel market on Wednesday and Thursday as it sells for N1,160 respectively.

The appreciation comes amid assurance by the governor of the Central Bank of Nigeria (CBN), Olayemi Cardozo, who has also planned to unveil the bank’s monetary policy thrust and economic outlook for 2024.

The apex bank, on Thursday, on its official X handle formerly Twitter, said, “The Governor, Central Bank of Nigeria, Mr. Olayemi Cardoso, to unveil the Bank’s Monetary Policy Thrust and Economic Outlook for 2024.”

The bankers’ dinner holding in Lagos is being organized by the Chartered Institute of Bankers of Nigeria (CIBN).

The CBN governor’s address takes on greater significance. It could draw a line under the chaos that’s engulfed the central bank in recent months, Bloomberg reports.

Although the rate is still unpalatable to the business community and Nigerians at large but a management consultant, Babatunde Adeniji, said the naira crisis is being largely driven by speculation following the country’s liquidity challenge.

“In terms of price, for the short time it is speculation that drives things. If you are a trader and you want to take a bet, with the level of distrust of the government, with no clear visible assurance of where the dollar is coming from to stabilise the naira, which position would you take? You are bound to take the position skewed towards the dollar,” he stated.

He said the country would begin to heave a sigh of relief when the authorities can pay up all the backlog of foreign exchange forwards with sufficient liquidity to meet pending obligations.

“Nigeria as a country does not have enough dollars to meet its promise. If we don’t do things that are substantial and visible, all that grammar would not help.”

Source: Saharareporters