Naira’s black market exchange rate improves to N970/$1, boost confidence in FG’s forex liquidity efforts
By Sodiq Adelakun
The black market exchange rate for the Nigerian naira has improved, with the currency now valued at N970 per dollar.
This positive development is a result of increased confidence in the government’s efforts to enhance dollar liquidity in the foreign exchange market.
In recent times, there has been a significant shift in the foreign exchange market in Nigeria.
Previously, individuals were purchasing dollars in advance for future needs, such as education fees. However, due to the government’s efforts to increase dollar liquidity, there has been a decrease in demand as people anticipate a drop in the exchange rate.
Over the past month, there has been a steady increase in Nigeria’s external reserves, resulting in the strengthening of the naira against the dollar.
Additionally, the Central Bank of Nigeria has made progress in clearing a portion of the foreign exchange backlog, which has helped restore confidence in the economy.
According to data from the Central Bank of Nigeria, the country’s external reserves rose by 0.51 percent to $33.39 billion at the end of October, compared to $33.22 billion at the beginning of the month.
In recent days, the local currency has appreciated against the dollar, with a 22.13 percent gain (N290).
On Friday, the dollar fell to N1,020 on the black market, down from its peak of N1,310 on Thursday of the previous week. It has been reported that the Central Bank of Nigeria has already begun clearing the backlog of foreign exchange and has delivered on over 75 percent to 80 percent of outstanding matured FX forwards in certain banks.
“The CBN is clearing only forwards to banks. I understand that it’s done for CIti and two other international banks. I believe that their swap positions with the CBN are much smaller than what they have with the local banks such as Access, Zenith, UBA, among others,” he said.
The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has reiterated that under his leadership, the Bank will focus mainly on the core mandate of achieving price stability.
