Naira Strengthens Against Dollar, Prompting Presidential Warning To Speculators

Naira Strengthens Against Dollar, Prompting Presidential Warning To Speculators

The Nigerian Naira saw a steady rise against the US Dollar on Thursday, closing at 1,382 Naira per dollar in the official market, marking an increase of N18. This positive trend followed a warning from the Presidency to currency speculators, cautioning against undermining the national currency.

The Naira’s appreciation followed significant gains in both the official and parallel foreign exchange markets the previous day, where it closed at 1,400 Naira per dollar in the black market. Data from the FMDQ Securities Exchange Limited revealed a 1.3 percent appreciation of the Naira due to increased dollar supply at the Nigerian Autonomous Foreign Exchange Market.

Intraday trading showed the Naira reaching highs of N1,598 per dollar and lows of N1,300 per dollar on Thursday, stronger than previous days. Market players supplied $288.47 million, marking a 7.46 percent increase from the previous day’s $268.29 million.

Over recent weeks, the Naira has gained N500 against the dollar at the unofficial market, as the Central Bank of Nigeria (CBN) worked to boost confidence in the FX market. Governor Olayemi Cardoso announced the successful resolution of all valid foreign exchange backlogs, settling obligations totaling $7 billion, with $1.5 billion already disbursed to bank customers.

This effort aimed to enhance credibility and confidence in the Nigerian economy, with external reserves showing sustained growth, reaching $34.37 billion as of March 12, 2024. Additionally, Diaspora remittances surged by 433 percent to $1.3 billion in February.

Special Adviser on Information and Strategy, Bayo Onanuga, urged currency traders to sell their dollar holdings, anticipating further appreciation of the Naira. Recent CBN interventions and crackdowns on illegal activities in the FX market have contributed to the Naira’s stability and reduced volatility.

As of Wednesday, the Naira closed at 1,410 Naira per dollar in the parallel market and 1,492 Naira per dollar in the official Nigerian Autonomous Foreign Exchange Market. The recent gains reflect increased confidence in the Naira’s stability amid regulatory efforts to curb speculation and illegal activities in the FX market.

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