Over the weekend, the Nigerian naira demonstrated signs of strength against the US dollar, appreciating to N1,275/$1, marking a significant increase from its previous rate of N1,400 to a dollar at the close of trading on Friday. This development coincided with efforts by the Senate’s Committee on Finance to address the currency’s instability and continuous depreciation.
According to currency traders at Wuse Zone 4 market, trading uncertainty has contributed to fluctuations in the exchange rate. They highlighted the need for decisive action from the government to either increase the currency value or allow it to depreciate for market stability. Traders expressed concerns about the risks associated with trading the naira due to its volatile nature, emphasizing the adverse impact on businesses.
The recent recovery in the naira’s value aligns with plans by the Association of Bureaux De Change Operators of Nigeria to unify the retail end of the foreign currency market. This initiative aims to enhance transparency and efficiency in forex transactions.
Despite this marginal gain, the naira had experienced a 26.2% loss in value over two weeks prior, reflecting the challenges faced in stabilizing the currency. The Central Bank of Nigeria’s allocation of $15.83 million to BDC operators aimed to bolster liquidity in the unofficial market.
However, data from FMDQ securities exchange indicated a continued depreciation of the naira against the US dollar at the official foreign exchange window, closing at N1,339/$ on Friday. This trend underscored a week of depreciation in the official market.
Concerned by the currency’s instability, the Senate Committee on Finance emphasized the need for proactive measures to safeguard the naira’s stability and resilience. Chairman Senator Sani Musa highlighted the challenges posed by internal and external factors, including fluctuations in global oil prices and fiscal deficits. The committee pledged to collaborate with stakeholders to implement effective policies and strategies to mitigate the impact of naira depreciation and foster economic stability.
Senator Musa urged Nigerians to remain vigilant and resilient amid the economic challenges, emphasizing the importance of collective efforts in overcoming these uncertainties and achieving economic growth and prosperity.
