The Nigerian naira maintained its upward trajectory against the United States dollar on Thursday, marking a notable gain of N18 to close at 1,382/$ at the official market. This positive development follows a stern warning from the Presidency directed at currency speculators, cautioning them against engaging in activities detrimental to the national currency.
Wednesday witnessed significant gains for the naira across both the official and parallel foreign exchange markets, with a closing rate of N1,400/dollar recorded at the black market. Data from the FX trading auction revealed a 1.3 percent appreciation of the naira, attributed to increased dollar supply at the Nigerian Autonomous Foreign Exchange Market (NAFEM), as reported by the FMDQ Securities Exchange Limited.
The intraday high for Thursday reached N1,598 per dollar, surpassing Wednesday’s closing rate of N1,620. Additionally, the intraday low strengthened to N1,300/$, indicating a positive trend compared to the previous day’s rate of N1,350/$1.
Market players contributed to the increased dollar supply, which rose to $288.47 million, marking a notable increase of $2 or 7.46 percent from the previous day’s figure of $268.29 million. This surge reflects growing confidence in the FX market, resulting in the gradual appreciation of the naira.
In recent weeks, the naira has witnessed a significant appreciation against the dollar, gaining N500 from its record low earlier this year at the unofficial market. The Central Bank of Nigeria (CBN) has played a pivotal role in bolstering confidence in the FX market, with Governor Olayemi Cardoso fulfilling the commitment to resolve all valid foreign exchange backlogs, addressing inherited claims totaling $7 billion.
Hakama Sidi Ali, CBN’s acting director of corporate communications, confirmed the successful resolution of the FX backlogs, highlighting the final payment of $1.5 billion to settle obligations to bank customers. Governor Cardoso underscored the importance of clearing the FX backlog to bolster credibility and confidence in the Nigerian economy.
Furthermore, Nigeria’s external reserves have shown consistent growth over the past month, with data from the CBN indicating a 3.62 percent increase to $34.37 billion as of March 12, 2024. Additionally, Diaspora remittances surged by 433 percent to $1.3 billion in February, compared to $300 million in January.
In light of these positive indicators, Bayo Onanuga, the Special Adviser on Information and Strategy, urged currency traders speculating on foreign exchange to sell their dollar holdings, anticipating further appreciation of the naira in the near future.
