Naira surges as Dollar rate plummets to N1,450 at black market

By Sodiq Adelakun

The Naira, witnessed a significant boost as the dollar rate plummeted to N1,450 at the black market on Monday.

This surge, marking a 2.07 percent increase, was attributed to speculators offloading hoarded foreign currency, resulting in a loss for those who purchased dollars at higher rates.

The Naira’s rally continued throughout the week, with the local currency strengthening against the dollar in the foreign exchange market.

Closing at N1,431.49 per dollar on Friday, the Naira experienced a remarkable 9.88 percent gain from its opening rate of N1,572.86 per dollar on Monday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This positive trajectory reflects a renewed confidence in the Naira’s stability and resilience, providing relief for businesses and consumers alike. As the Naira maintains its upward momentum, investors and stakeholders remain optimistic about Nigeria’s economic prospects amidst ongoing market fluctuations.

On a daily trading basis, the naira appreciated by 1.52 percent as the dollar was quoted at N1,431.49 on Friday, stronger than the 1,453.28 quoted on Thursday at NAFEM according to data from the FMDQ Securities Exchange.

…Nothing to celebrate in 1,200 naira/dollar exchange projection — Aigbogun

The summary of the daily FX market trading showed that the intraday high closed at N1,468 per dollar on Friday, stronger than N1,598/$1 closed at on Thursday. The intraday low closed flat at N1,301 per dollar on Friday as against N1,300/$1 on Thursday.

The naira has been appreciating against the dollar recently following some foreign exchange reforms by the Central Bank of Nigeria (MPC).

In a sweeping wave of transformation, Nigeria is embracing a series of bold reforms to revitalize its foreign exchange landscape. Among the key initiatives are the harmonisation of exchange rate platforms, a newfound openness in the FX market, and the resolution of lingering FX obligations for banks and airlines.

The introduction of a Price Verification System (PVS) adds a layer of transparency, while limits on banks’ Net Open Position aim to enhance accountability. Moreover, the removal of the daily cap on remunerable Standing Deposit Facility (SDF) marks a significant shift in monetary policy, signaling a more dynamic approach to liquidity management.

But the changes don’t stop there. The overhaul of the Bureau De Change (BDC) segment promises to inject stability and clarity into the market, fostering an environment conducive to fair pricing and efficient allocation of resources.

With a focus on creating a balanced and vibrant marketplace, additional measures include the promotion of a willing buyer-willing seller dynamic, the liberation of margin constraints on International Money Transfer Operator (IMTO) remittances, and the introduction of a versatile two-way quote system.

As these comprehensive reforms take shape, Nigeria’s Autonomous Foreign Exchange Market is poised for a new era of resilience, transparency, and prosperity.