Naira Appreciates to N1382, Data from FMDQ Shows
The Nigerian Naira has continued to clawback losses as the local currency appreciated to N1382 per US dollar on Thursday, according to daily movement information on spot FX data obtained from the FMDQ platform.
In the parallel market, the naira closed at ₦1,380 to the dollar as sanity returned to the space after a combination of combative measures and a regulatory shift. The local currency is appreciating as the central bank maintains efforts to boost investors’ confidence.
The apex bank said FX backlog has been cleared now, removing currency trading bottleneck in the forex market. Analysts said there is hope to see the naira maintain its rally following FX repayment and sustained accretion into the nation’s gross external reserves. The central bank initiated reform to obtain a market-clearing exchange rate.
It said the authority would sell the US dollar to the Bureau de Change to reduce spurious demand for the US dollar while capping operators’ returns. Now, the CBN has achieved a plan to clear FX backlog obligations to banks and airlines. Analysts said this will boost FX liquidity levels in the forex market and help the local currency heal.
The CBN told investors’ conferences in London that exchange rate volatility has moderated, and the spread has narrowed to post-interventions. The external reserves stood at US$34.388 billion today.
CBN projected that external reserves would increase marginally to US$35,014.28 million at end-March 2024, from US$34,984.00 million as of March 14, 2024, citing FX reform and improved oil revenue expectations.
“The level of reserves could finance 7.0 months of imports for goods and services and 10.0 months of imports for goods only based on import statistics for Q3 2023, analysts quoted the apex bank telling foreign investors.
Oil prices traded downwards due to the lagging effect of the appreciation of the US dollar. Brent crude decreased by 0.70% to reach $85.35 per barrel, and WTI crude similarly dropped by 0.82%, settling at $80.61 per barrel. #Naira Appreciates to N1382, Data from FMDQ Shows
