The Nigerian Naira appreciated significantly in the foreign exchange (FX) market as trading resumed after the Easter holiday, with rates dropping to N1,238.3 against the US dollar.
Bureau De Change (BDC) operators reported buying rates at N1,220 per dollar and selling rates at N1,265 per dollar for both cash and transfer transactions.
In the parallel or black market, the Naira saw a further appreciation to N1,225 per dollar, marking a 1.99 percent increase from the previous week’s close of N1,280.
This uptrend in the Naira’s value is attributed to the Central Bank of Nigeria (CBN)’s recent initiative to clear all verified foreign exchange backlogs, with a final tranche of $1.5 billion being processed.
According to Afrinvest Securities Limited, the Naira experienced a month-on-month appreciation of 21.8 percent in March 2024, with projections indicating a continuation of this strengthening trend into April.
The report highlighted the Naira’s performance in the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, where it exchanged at N1,309.39/$1, alongside a 19.6 percent month-on-month gain in the parallel market to close at N1,300.00/$1.00.
The Naira’s resurgence is bolstered by the CBN’s monetary policy adjustments, including increased Open Market Operations (OMO) sales and a significant interest rate hike.
Analysts from Afrinvest anticipate the Naira will maintain its current trajectory, supported by continued liquidity management and capital inflow attraction efforts by the CBN.
The president of the Association of Bureaux de Change Operators of Nigeria (ABCON), noted the positive impact of monetary policy tightening, interest rate increases, and the clearance of a $7 billion forex backlog on dollar liquidity.
Furthermore, the reintegration of BDCs into the market has notably enhanced dollar availability, contributing to the Naira’s strengthening performance.
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