Naira rises to N1,400/$ as traders dump their foreign exchange holdings.
On Wednesday, the naira strengthened against the US dollar on both the official and black markets. On the black market, the local currency saw a notable increase in value relative to the US dollar.
The Central Bank of Nigeria (CBN) has announced the final settlements of all valid foreign exchange backlogs, fulfilling a key pledge of the apex bank governor, Mr. Olayemi Cardoso, to process an inherited backlog of $7bn in claims. The Acting CBN Director, Corporate Communications, Mrs. Hakama Sidi Ali, recalled the central bank having recently cleared $1.5bn from the backlogs.
On Wednesday, the naira closed trading at 1,410/dollar at the parallel market and N1,492 at the official Nigerian Autonomous Foreign Exchange Market. The gain recorded by the naira at the official market represents an appreciation of N68 or 4.5%, from the N1,560/$1 recorded on Tuesday at NAFEM, and a gain of 13.5% or N190 at the parallel market. According to findings by The PUNCH, the exchange rate has been gaining lately as speculators begin to dump their dollar stocks, following waning demand by prospective buyers amid CBN clampdowns.
A string of circulars by the CBN in recent weeks and months have helped to plug leakages and blocked loopholes previously explored by currency speculators and racketeers. Additionally, the recent clampdowns on the activities of illegal BDC operators in Lagos, Abuja, and Kano by the operatives of the Economic and Financial Crimes Commission have helped to reduce the volatility of the naira.
The daily foreign exchange market turnover increased to $268.29m from $195.13 million recorded on Tuesday. The PUNCH exclusively reported that forex turnover at the official foreign exchange market increased to $11.43bn within two months of trading, following fresh reforms by the CBN. An analysis of reports and data of daily forex transactions recorded on the website of FMDQ Securities indicated that the figure increased by 185.75% or $7.43bn between January and March 15th, 2024.
The pressure on the naira/dollar exchange rate is beginning to ease as Nigeria's external reserves have sustained growth in one month. Data from the CBN showed that the foreign currency reserves increased by 3.62 per cent to $34.37bn as of March 12, 2024 from $33.17bn recorded at the beginning of February 2024. The CBN recently announced a remarkable upswing in Diaspora remittances, soaring by 433% to reach $1.3b in February, compared to $300m in January.
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