Over the weekend, the Nigerian Naira experienced a significant recovery, appreciating to N1,275 per US dollar at the parallel market.
This marked a 9.8% increase from its previous rate of N1,400 per dollar at the end of trading on Friday.
This rebound comes amidst calls from the Senate, particularly its Committee on Finance, for a united effort by all stakeholders to address the persistent instability and deterioration of the Naira’s value. The Senate emphasized the critical need for actions that can stabilize and sustain the Naira’s performance.
Currency traders in the bustling Wuse Zone 4 market, while speaking to journalists on Sunday, pointed to the unpredictable market conditions as the primary cause for the recent fluctuations in the exchange rate.
They highlighted the urgent need for the government to decide on either strengthening the Naira or allowing it to devalue to achieve market stability. They also noted that Sunday saw no defined selling rate due to the absence of trading activity.
Malam Yahu Ibrahim, a trader, expressed the challenges faced by operators due to the Naira’s volatility. “We take risks against ourselves every day because I don’t know how they are doing it, the naira is just swinging,” he said, urging decisive action from the government to either firmly control the dollar rate or let the Naira stabilize on its own.
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Concerns were also voiced by Abubakar Taura, another trader, regarding the uncertainty of future exchange rates and potential drastic measures from the Central Bank of Nigeria (CBN) to stabilize the currency.
Simultaneously, the Association of Bureaux De Change Operators of Nigeria (ABCON) has announced plans to unify the retail end of the foreign currency market. ABCON President, Aminu Gwadabe, explained that the initiative aims to address market volatility and enhance compliance among Bureaux De Change operators through technological advancements such as geo-mapping and physical office verification apps.
Before this gain, the Naira had weakened significantly on the parallel market, losing 26.2% in value since April 12, 2023. However, the Central Bank of Nigeria recently allocated $15.83 million to 1,583 BDC operators to improve liquidity in the unofficial market.
Despite these efforts, the official foreign exchange window continued to show a declining trend, with the Naira closing at N1,339/$ on Friday, a decrease of 2.24% from Thursday’s rate, as reported by the FMDQ securities exchange.
Trading activity in the Nigerian Autonomous Foreign Exchange Market saw transactions totaling $1 billion, indicating robust engagement despite ongoing economic challenges.
The Senate has responded to these market dynamics by pushing for more comprehensive measures to stabilize the national currency.
