The Naira experienced a varied performance against the United States dollar in the foreign exchange markets, with gains noted in the official market and a contrasting trend observed in the unofficial market.
According to reports, the official foreign exchange market closed the month of February 2024 on a positive note, surpassing the unofficial market rates.
Data from the Financial Markets Dealers’ Quotation (FMDQ) securities revealed that the Naira strengthened in value at the official market. The currency appreciated to N1,595.11 per dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, February 29. This represents a slight uptick of 0.09% or N14.40 compared to the previous day’s closing rate of N1,609.51 per dollar.
The appreciation extended to other major currencies as well. The Naira improved against the Pound Sterling, closing at N2,046.19 per pound, marking a gain of N20.34 from the previous session’s N2,066.53 per pound. Similarly, against the Euro, the Naira strengthened to trade at N1,751.64 per euro, rising by N16.5 compared to Wednesday’s closing rate of N1,767.79 per euro.
This positive performance was attributed to the Central Bank of Nigeria (CBN)’s injection of more supply into the market. Forex transactions saw a significant increase of 82.3%, reaching $217.14 million from $119.14 million the previous day.
However, the situation was different in the parallel market, where the Naira depreciated against the US Dollar. Selling at N1,500 per dollar, the Naira weakened by N50 compared to the previous day’s rate of N1,450 per dollar.
Meanwhile, the Peer-to-Peer (P2P) trading of the Naira remains suspended following regulatory actions against cryptocurrency firms like Binance.
In a separate report, Nigeria’s foreign reserves were reported to have dropped to a two-year low of $33 billion, attributed to reduced earnings from crude oil sales. The reserves play a crucial role in the CBN’s efforts to maintain the strength of the Naira against other currencies.
Despite challenges, the official market’s positive performance signifies progress, while efforts continue to stabilize the Naira across all exchange platforms.
