Naira surges as FX resumes Post-Easter, hits 1,225/$ on parallel market

Following the Easter holiday break, the foreign exchange (FX) market reopened on Tuesday with a notable surge in the value of the Naira against the US dollar. Bureau De Change (BDC) operators reported buying the dollar at N1,220 and selling to customers at N1,265 per dollar.

This appreciation continued on the parallel market, where the Naira strengthened further to 1,225 per dollar, marking a significant 1.99 percent increase from the previous week’s close of N1,280.

The positive trend in the Naira’s value was attributed to the Central Bank of Nigeria’s (CBN) proactive measures, particularly the clearance of all verified FX backlogs, totaling $1.5 billion.

March 2024 saw the Naira appreciate by 21.8 percent month-on-month, and analysts predict that this upward trajectory is likely to persist into April, buoyed by the CBN’s policy interventions.

A report by Afrinvest Securities Limited noted that Naira strengthened 21.8 percent m/m against the base currency

In the latest update from the Nigerian currency markets, the Naira demonstrated resilience against the US dollar in various segments.

At the Nigerian Autonomous Foreign Exchange Market (NAFEM) window, the Naira was observed exchanging at N1,309.39 per US dollar in the preceding month, reflecting stability in comparison to previous rates.

Notably, the parallel market segment witnessed a significant uptick in the value of the Naira, appreciating by 19.6 percent month-on-month to close at N1,300.00 per US dollar.

This upward trend contributed to a positive outlook for the Naira’s performance in April.

Moreover, the NAFEM segment experienced an 8.7 percent month-on-month improvement in daily average turnover, settling at $857.8 million as of March 28, 2024.

Analysts from Afrinvest attribute this enhanced turnover to increased Open Market Operations (OMO) sales, driven by the Central Bank of Nigeria’s decision to raise the Monetary Policy Rate.