In a recent turn of events, the Nigerian naira has shown signs of resilience against the United States dollar, registering a slight gain on the official Nigerian Autonomous Foreign Exchange Market. According to data from FMDQ Exchange, the naira appreciated to N1,499 per dollar, marking a 2.3% increase or N35 gain compared to its previous all-time low of N1,534 per dollar.
This development comes amidst a backdrop of economic reforms, including the removal of fuel subsidy and the unification of the exchange rate market by President Bola Tinubu. While the official market saw a marginal improvement, the naira has experienced a steady depreciation trend over recent months, sliding from N464.67 per dollar in May 2023 to N1,490 per dollar in February 2024. Similarly, the parallel market has witnessed a decline, with the local currency falling from N763 per dollar to N1,470 per dollar during the same period.
Despite the modest gain on the official market, concerns persist over the naira’s performance, particularly in light of recent lows recorded against the dollar. Just on Monday, the naira hit a new low of N1,534 per dollar, following previous lows of N1,099.05 per dollar in December 2023 and N1,348.63 per dollar in January 2024.
At the parallel market, the naira maintained its upward trajectory, trading between N1,503 and N1,530 per dollar at closing rates on Monday. Currency traders, also known as Bureau De Change operators, reported sustained demand for the dollar, with rates reaching N1,530 per dollar at the close of trading.
Ibrahim Taura, a BDC operator in Wuse, Abuja, highlighted the persistent demand for the greenback, despite the high exchange rate. Meanwhile, Nuhu Zakari, another BDC operator at the Abuja airport, noted purchasing the dollar at N1,525.
In a related development, data from the FMDQ revealed a significant decrease in dollar sales by commercial banks, dropping by 54.2% from $253.77 million on Friday to $116.11 million on Monday. This decline follows a week where commercial banks collectively sold $1.97 billion in foreign exchange.
As the naira continues to navigate through economic challenges, market participants remain attentive to the currency’s performance and government interventions aimed at stabilizing the foreign exchange market.
