Naira Heads for Best Run, Official Rate Gains 6.6%
The Nigerian naira roared against the dominant US dollar in the forex market to settle at N1, 072. The local currency heads for biggest rally since June 2023 when the local currency was officially devalued.
The Central Bank of Nigeria (CBN) has continued to address FX liquidity challenge in order to ensure stability of the local currency against US, Sterling and other foreign currency.At the current rate of growth, exchange rate has beaten all bullish projection in a fast and furious manner as the apex bank reform continues to yield results.
The local currency recovery gives hope to companies and small businesses owners that rely on imported goods for productive activities. Reduced FX outflow has continued to `support the recalibration of Naira to US dollar exchange rates.
According to data obtained from FMDQ Securities Exchange, the Naira appreciated by 6.57%, closing at ₦1,072.74 to the US dollar. In anticipation of the Central Bank selling US dollars to Bureau De Change (BDCs), the exchange rate at the official window had slightly decreased the day before, to ₦1,148.14 per dollar.
In the parallel market, the naira settled at ₦1,045 to the US dollar. CBN is expected to announce US dollar sales to currency traders in the alternative market. The CBN sold $10,000 to 1508 BDC operators at N1,101 during the most recent forex auction sales, capping their FX sales spread at 1.5%.
Analysts asserted that the authority’s resolve to maintain the value of the local currency by employing all forex injections to lessen the challenge of FX illiquidity in both the official and parallel markets was the cause of the drop in external reserves.
Despite increased foreign exchange inflows from foreign portfolio investors purchasing government borrowing instruments, Nigeria’s gross external reserves have dropped sharply to $32 billion.
In the global commodity market, oil prices experienced a notable downturn, characterized by a negative shift. Specifically, Brent crude saw a decline of 1.27%, settling at $88.87 per barrel, while WTI crude also exhibited a decrease, dipping by 1.24% to $84.30 per barrel. #Naira Heads for Best Run, Official Rate Gains 6.6% Naira Suffers Big, CBN Goes Ballistic Against FX Whales
