The Federal Government of Nigeria, and indeed Nigerians are once again in high hopes as the naira maintained a steady appreciation against the United States dollar, gaining N18 to close at 1,382/$ in the official market.
The naira appreciation against the dollar happened a day after the local currency recorded major gains at both the official and parallel foreign exchange markets. It closed at the black market at N1,400/dollar on Wednesday.
According to data from the FMDQ Securities Exchange Limited, the conclusion of the FX trading auction showed that naira appreciated by 1.3 per cent following increased dollar supply at the Nigerian Autonomous Foreign Exchange Market.
The intraday high closed at N1,598 per dollar yesterday, and it is said to be stronger than N1,620 that it closed at on Wednesday. Also, the intraday low strengthened to N1,300/$ on the same day, stronger than N1,350/$ that it closed at on the previous day.
The dollar provided by FX market players increased to $288.47, an increase of at least $2 or 7.46 per cent from $268.29 million recorded on Wednesday from $195.13 million at NAFEM. In recent weeks, the naira took giant strides and thus gained N500 against the dollar from its record low this year at the unofficial market, as the CBN builds confidence in the FX market.
On Wednesday, the Central Bank of Nigeria announced that it has successfully resolved all valid foreign exchange backlogs, as pledged by Governor Olayemi Cardoso, and addressed inherited claims amounting to $7bn.
CBN’s acting Director of Corporate Communications, Hakama Sidi Ali, stated this in a statement sent via email. She stated that the Apex Bank has finalised the payment of $1.5 billion to settle obligations to bank customers, and has thus cleared the remaining balance of the FX backlog.
It is safe to say that the strain on the naira/dollar exchange rate is gradually diminishing, with Nigeria’s external reserves showing sustained growth over the past month.
According to data from the CBN, foreign currency reserves went up by 3.62 per cent to $34.37 billion on March 12, 2024, compared to $33.17 billion recorded at the beginning of February 2024. A noticeable surge in Diaspora remittances, which skyrocketed by 433 per cent to $1.3 billion in February, compared to $300 million in January, was also reported by the CBN.
The Special Adviser on Information and Strategy, Bayo Onanuga, cautioned currency traders speculating on foreign exchange to sell their dollar holdings to prevent potential losses as the naira is expected to increase in value soon.
Onanuga said, “With backlog FX settled, Naira is set to appreciate further, faster. Currency speculators should quickly dump their stock of dollars to avoid sorrows and tears.”
The gain recorded by the naira at the official market shows a N68 or 4.5 per cent appreciation, from the N1,560/$1 recorded at NAFEM, and a gain of 13.5 per cent or N190 recorded at the parallel market.
