Naira jumps to 8-month high of 1,120/$ as dollars flood black market


The Naira on Thursday rose to an eight-month high of 1,120 per dollar on the parallel market, popularly called black market, driven by a series of foreign exchange (FX) reforms of the Central Bank of Nigeria (CBN) that has unlocked dollar liquidity.

With the current exchange rate the Naira has gained 62.95 percent (N705) over the dollar compared to the level of N1,825/$1 in February 2024, according to the data compiled from online platforms and street traders.

“The dollar has fallen because there is no demand. The market is calm due to the holidays and there are enough dollars in the market now,” one trader told BusinessDay on Thursday.

Nigeria’s currency on Monday before the holidays strengthened to 1,230.61 per dollar on the official FX market, despite the declining external reserves.

After trading on Monday, the Naira gained 1.66 percent as the dollar was quoted at N1230.61, stronger than N1,251.05 quoted on Friday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data released by the FMDQ Securities Exchange.

The intraday high closed at N1,261 per dollar on Monday, stronger than N1,281 closed on Friday. The intraday low appreciated to N1,200 from N1,220 on Friday.

Dollar supply by willing buyers and willing sellers dropped by 49.43 percent to $125.55 million on Monday from $248.27 million recorded on Friday.

The external reserves, which gives the Central Bank of Nigeria (CBN) the firepower to defend the Naira have been declining, following the apex bank’s interventions to stabilise the currency.

Data from the CBN showed that Nigeria’s foreign currency reserves declined by 2.95 percent in the last 10 days to $33.434 billion as of April 4, 2024 compared to $34.449 billion in March 18, 2024.

The apex bank last month said it has successfully resolved all valid foreign exchange backlogs, as pledged by Governor Olayemi Cardoso, addressing inherited claims amounting to US$7 billion.

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