The naira experienced a shift in its value dynamics, strengthening at the official window following reassurances from Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), regarding the bank’s commitment to addressing currency volatility.
At the official forex window, the local currency exhibited an appreciation of 1.09%, closing at 1,419.86/$, as reported by data from the FMDQ, in contrast to the previous rate of 1,435.53/$ on Friday.
Last week, the naira plummeted to a record low of 1482.57/$ at the official window, despite intervention efforts by the CBN and the Federal Government to bolster forex market liquidity. However, subsequent policy pronouncements from the CBN have sparked a rebound in the local currency’s value.
Conversely, the naira’s performance on the parallel market remained lackluster, with trading ranging between 1,440/$ and 1,460/$ at the close of Monday’s session, as reported by Bureau de Change operators. This marks a marginal improvement from Friday’s closing rate of 1,450/$ in the alternative forex market.
BDC operators attributed the dollar’s gradual appreciation against the naira to the actions of hoarders, with selling prices reaching up to 1,455/$ and buying prices hovering around 1,445/$.
Cardoso highlighted the CBN’s concerted efforts to streamline FX supply, addressing impediments to remittance flows and curbing banks’ ability to retain positions. Additionally, initiatives have been launched to enhance the attractiveness of naira assets to foreign investors, coupled with the rechanneling of export proceeds from the national energy sector through the central bank.
-26 September 2024
