Naira Strengthens Across Official and Parallel Markets

Recent data from FMDQ Securities indicates a significant appreciation of the Naira against various foreign currencies in both official and unofficial exchange markets.

In the Nigerian Autonomous Foreign Exchange Market (NAFEM), the Naira closed trading at N1,072.74/$1 on Wednesday, marking a notable 6.6% or N75.40 appreciation compared to the previous day’s rate of N1,148.14/$.

The Naira also saw improvements against the pound sterling and the euro in the official market, with CBN data revealing an appreciation of N298.92 to sell at N1,147.53/£1 compared to the previous day’s rate of N1,446.45/£1, and a gain of N14.62 to quote at N1,220.17/€1 versus N1,234.79/€1.

In the unofficial market, the Naira continued its strong performance, appreciating by N50 to trade at N1,050/$1 compared to the preceding day’s rate of N1,100/$1, according to traders.

Central Bank of Nigeria’s Governor Olayemi Cardoso clarified that the apex bank is not using the nation’s foreign reserves to defend the Naira. He emphasized the intention to foster a vibrant forex market where the Naira can operate independently. Cardoso attributed the recent decline in foreign reserves to settling other obligations rather than defending the Naira, highlighting the importance of maintaining reserves for such purposes.

He underscored the collaboration between the monetary and fiscal authorities, noting that the shift in approach towards orthodox central banking aims to instill confidence in the Nigerian currency.


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