The Nigerian naira continued its positive momentum against the United States dollar on Thursday, appreciating by N18 to close at 1,382 naira per dollar in the official market. This development coincided with a stern warning from the Presidency directed at currency speculators, cautioning them against undermining the national currency and emphasizing that those engaged in such activities would face consequences.
The naira’s gains follow significant improvements recorded on Wednesday across both the official and parallel foreign exchange markets, with the local currency closing at N1,400 per dollar in the black market. Data from the FMDQ Securities Exchange Limited revealed that the naira appreciated by 1.3 percent at the Nigerian Autonomous Foreign Exchange Market, attributed to increased dollar supply.
Intraday trading saw the naira strengthen further, reaching an intraday high of N1,598 per dollar and a low of N1,300 per dollar on Thursday, surpassing the previous day’s closing rates. Market players at the FX market supplied $288.47 million, marking a notable increase from the previous day’s figures.
In recent weeks, the naira has experienced a significant improvement, gaining N500 against the dollar in the unofficial market, buoyed by the Central Bank of Nigeria’s efforts to bolster confidence in the FX market. The CBN recently announced the successful resolution of all valid foreign exchange backlogs, fulfilling Governor Olayemi Cardoso’s pledge to address inherited claims amounting to $7 billion.
Hakama Sidi Ali, the CBN’s acting director of corporate communications, confirmed the completion of payments totaling $1.5 billion to settle obligations to bank customers, effectively clearing the remaining FX backlog. Governor Cardoso reiterated the importance of resolving the backlog to enhance credibility and confidence in the Nigerian economy.
The strain on the naira-to-dollar exchange rate is gradually easing, supported by sustained growth in Nigeria’s external reserves, which rose to $34.37 billion as of March 12, 2024. Additionally, Diaspora remittances surged by 433 percent to $1.3 billion in February, compared to $300 million in January, according to CBN data.
Meanwhile, Bayo Onanuga, the Special Adviser on Information and Strategy, advised currency traders speculating on foreign exchange to divest their dollar holdings, anticipating further appreciation of the naira in the near future.
