Naira Rallies Across FX Markets, Official Rate Now N1382
Exchange rates continued to rise against the US dollar on Tuesday, defying the recent past downward trend in the forex markets thanks to confidence-boosting foreign currency sales to deposit money banks, bureau de change (BDCs), and FX backlog settlement.
Following the monetary authority’s several attempts to lessen negative FX movement using policy measures, the volume of US dollars available at the official window adequately met the demand for foreign currency at the official window. Since last week, the value of the naira has been rising steadily.
According to data obtained from the FX market, the naira appreciated by 1.78%, closing at ₦1,382.95 per US dollar at the official market. In the Parallel market, the Naira closed at ₦1,300 to the US dollar after the apex bank sold $10,000 to the Bureau de Change operators at N1251.
According to analysts speaking with MarketForces Africa, the apex bank is better able to regulate the direction of the FX market thanks to the capping of FX spread on the US dollar injected into BDCs. Based on information provided by FMDQ Securities Exchange, the naira ended the day at N1382 on the Nigerian autonomous foreign exchange market.
Yemi Cardoso, the governor of the CBN, announced at the policy committee meeting that the apex bank has settled verified forward contracts and that all legitimate backlogs in foreign exchange have been cleared.
A third party reconciliation determined that $2.4 billion of the $7 billion in total FX obligations were invalid. The infractions noted for forex forwards deliverable deemed invalid include no Form M and/or allocations made with no requests or the absence of naira equivalent.
Law enforcement agencies are looking into void forward contracts, according to the authority. However, the CBN committee expressed satisfaction with the degree of stability the foreign exchange market has attained over the last few weeks.
This demonstrates the impact of the CBN’s recent actions and policy adjustments, as well as increased market transparency.
Analysts surmise that the decision to reduce the FX backlog has bolstered investor confidence and drawn foreign capital to Nigeria. The exchange rate has increased by 13% at the official window since the last MPC meeting in February, according to CardinalStone’s report.
The CBN affirmed its commitment to sustaining its intervention in the FX market to ensure that the naira remains stable while building confidence in the market in the medium term. #Naira Rallies Across FX Markets, Official Rate Now N1382 Treasury Bills Yields Pullback as Investors Increase Bets
