Naira Appreciates against US Dollar after BTA/PTA Cut
The Nigerian local currency, the Naira, appreciated against the United States (US) dollar on Wednesday, exchanging at N461.09 at the Investors’ and Exporters’ foreign exchange (FX) window, market data shows.
The gain, which represented an increase of 0.07 per cent, compared to the N461.42 it exchanged to the dollar on Tuesday was supported by declining demand for foreign currencies in the market.
The open indicative rate closed at N461.30 to the dollar on Wednesday, FX traders stated in market notes. It was noted that an exchange rate of N462.11 to the US dollar was the highest rate recorded within the day’s trading before it settled at N461.09.
In the market, the Naira sold for as low as N446 to the dollar within the day’s trading. A total of 142.25 million dollars was traded at the official Investors’ and Exporters’ window. The decline in demand for FX was supported by weak import bills while the export position appears to improve – albeit moderately.
Manufacturers’ import bills slide as economic activities temper with a decline in local demand for goods and services as inflation pressures persist. The exchange rate has been projected to cross N500 in 2023 as the apex bank FX intervention stays below the pre-pandemic period.
Apart from that, there is a signal that FX scarcity has worsened as Nigerian deposit money banks cut personal and business travelling allowance by 50 per cent, a move targeted to implement the Central Bank of Nigeria circular.
The cut has signalled that FX crisis in Nigeria has worsened, though external reserves has been declining, the gross position is still strong enough to support the local currency from free falling. In the coming months, analysts said they expect CBN to devalue the naira.
Already, the gap between official and parallel market rates has given birth to enhanced currency speculation as the country battles foreign currency shortage. # Naira Appreciates against US Dollar after BTA/PTA Cut Nigerian Banks Give Fresh Update on Naira Swap