The Nigerian Naira continues its remarkable climb against the US dollar, nearing the significant threshold of 1,000 Naira to 1 dollar in the parallel market.
Closing trading activities on Monday, the Naira stood strong at N1,136/$ at the official market and N1,050/$ at the parallel market.
Traders have been anticipating this surge, with predictions indicating the dollar’s potential fall to below N1,000 by the week’s end.
At the official foreign exchange market, data from the FMDQ Exchange reveals a notable surge of 6.1 per cent or N69, reaching N1,136/$ on Monday from N1,205/$ recorded on Friday.
Despite a slight drop in total daily turnover to $251.60 million from $281.34 million on Friday, the intra-day high saw a significant improvement, closing at N1,227 per dollar from N1,265 per dollar quoted on Friday. The intra-day low appreciated by N100/$1, with the dollar quoted at N1,000 on Monday, stronger than the N1,100 quoted on Friday.
This upward trend follows a series of foreign exchange directives by the Central Bank of Nigeria aimed at stabilizing the Naira, including the resolution of valid foreign exchange backlogs amounting to $7 billion.
Inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) have also seen a substantial increase, rising by 41.7 per cent to $3.75 billion compared to $2.64 billion in February.
Last week, the Central Bank of Nigeria revised the exchange rate for Bureau De Change operators to N1,101 per dollar from N1,251/$1, planning to sell $15.88 million to 1,588 eligible BDC operators.
Analysts at Afrinvest anticipate further strengthening of the Naira as the CBN intensifies efforts to bolster liquidity in the market.
Related Posts
- Ngelale Commends Tinubu’s Approach on Naira Resurgence
- Naira Strengthens to N1260/$ in Parallel Market
- CBN Former Deputy Governor Slams Naira Appreciation Against Dollar, Says ‘Artificial’
However, traders at the unofficial market, particularly at the popular Wuse Zone 4 market, expressed concerns over the current Naira rates, emphasizing that the business is becoming less profitable. Some traders reported buying the dollar at rates between N950 and N980 and selling between N1,010 and N1,020. Others noted a downward trend, with rates nearing below N1,000 per dollar for both buying and selling.
This trend is reflected in the sentiments of traders who reported buying at N900 and selling at N940 per dollar, indicating a challenging market environment.
Last week, Goldman Sachs Group noted the Naira’s impressive performance globally in April, expecting further gains driven by effective policy management by the Central Bank of Nigeria, including significant interest rate increases in February and March.
