The Nigerian currency experienced a notable surge in value against the US dollar across the foreign exchange market, with data indicating a significant increase both in the official and unofficial markets.
According to reports from FMDQ Securities, the Nigeria Autonomous Foreign Exchange Market (NAFEM) saw the naira closing at N1,609.51/$1 on Wednesday, February 28, 2024. This marked a substantial improvement from the previous day’s exchange rate of N1,615.94/$1.
The positive performance of the naira comes amidst a reduction in the supply of forex, with a decrease of 22.7% or $35.02 million observed, bringing the total supply down to $119.14 million from $154.16 million. Despite this shortfall, the naira maintained stability against other major currencies such as the pound sterling and the euro, trading at N2,023.64/£1 and N1,729.36/€1, respectively.
In the unofficial markets, the naira also demonstrated strength against the US dollar. In the parallel market, the currency appreciated by N150 against the dollar, selling at N1,450/$1 compared to the previous rate of N1,600/$1.
However, amidst these positive developments, major cryptocurrency exchanges including Binance, Coinbase, and Quidax have suspended the buying and selling of USDT and USDC for Naira. This decision follows statements from the governor of the Central Bank of Nigeria, Olayemi Cardoso, who raised concerns over the flow of $26 billion through Binance Nigeria from undisclosed sources.
Prior to this surge in the naira’s value, the Central Bank of Nigeria adjusted the foreign exchange rate for clearing imported goods at Nigerian ports, a move that garnered reactions from various quarters. Peter Obi, in response, expressed apprehensions regarding the potential negative impact on businesses and offered suggestions to aid the naira’s recovery against the US dollar.
As the naira continues to show signs of resilience in the foreign exchange market, stakeholders remain vigilant, closely monitoring developments and policy changes to navigate the currency’s trajectory amid economic dynamics.
