Naira gains further as dollar supply surges by 64.36%

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Naira appreciated further as foreign exchange (FX) market recorded increased dollar supply on Friday at the official market.

 

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This reflected dollar sales by banks in response to the directive by the Central Bank of Nigeria (CBN) on selling their excess dollars to the official FX market.

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The volume of dollar transactions or the daily FX market turnover rose to $440.13 million on Friday from $156.86 million recorded on Thursday.

 

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After trading on Friday, naira gained 1.84 percent as the dollar was quoted at N1,435.53, which was stronger than N1,461.90 quoted on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), data from the FMDQ showed.

 

Intraday high steadied at N1,526 per dollar, while the intraday low strengthened to N838.96/$1 on Friday as against N891 per one dollar.

 

The Naira weakened to N1,440 per dollar at the black market due to strong demand for dollars, after recovering to N1,400 on Wednesday following the CBN’s FX policies.

 

Nigeria’s foreign currency reserves show a 1.5 percent month-on-month gain in January, reaching US$33.4 billion. Analysts from Afrinvest Securities suggest that this increase may be linked to approximately $3.3 billion inflows from the Afrexim bank crude-oil-tied support facility.

READ ALSO: No Plans To Convert $30bn Domiciliary Deposits To Naira – CBN

 

The domestic foreign exchange landscape remains dynamic amidst global economic uncertainties.

 

The CBN within the week lifted the cap on the allowable limit around the previous day’s closing rate for International Money Transfer Operators (IMTOs), expanding the regulatory framework. This adjustment grants IMTOs increased flexibility in setting exchange rates.

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The move followed the CBN’s announcement of limits on banks’ foreign currency holdings, expressing concern about the growing forex exposures on their balance sheets due to the local currency’s decline against the U.S. dollar.

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