On Thursday, the naira continued its consistent upward trend versus the US dollar, closing at 1,382/$ at the official market after gaining N18.
This occurred as the President issued a warning to currency speculators, threatening to burn their fingers if they committed any unpatriotic acts against the national currency.
The local currency saw significant gains at the official and unofficial foreign exchange markets the day before the naira’s gain. On Wednesday, it closed at N1,400 per dollar on the black market.
According to data from the FMDQ Securities Exchange Limited, the summary of the FX trading auction showed that the naira increased by 1.3 percent as a result of increased dollar supply at the Nigerian Autonomous Foreign Exchange Market.
On Thursday, the intraday peak closed at N1,598 per dollar, stronger than N1,620.
closed on Wednesday. Additionally, that day’s intraday low strengthened to N1,300/$, surpassing the previous day’s closing value of N1,350/$1.
Players in the foreign exchange market contributed $288.47 to the total dollar supply, up $2 or 7.46 percent from the $268.29 million on Wednesday at NAFEM.
As the CBN increases confidence in the foreign exchange market, the naira has gained N500 against the dollar in recent weeks, recovering from its record low this year at the unofficial market.
In response to inherited claims totaling $7 billion, the Central Bank of Nigeria announced on Wednesday that it had effectively settled all legitimate foreign exchange backlogs, as promised by Governor Olayemi Cardoso.
This information was provided in a statement that was mailed by Hakama Sidi Ali, CBN’s acting director of corporate communications. According to her, the CBN completed paying $1.5 billion to settle debts owed to bank clients, which cleared the remaining amount of the foreign exchange backlog.
In order to boost credibility and confidence in the Nigerian economy, Cardoso emphasized how important it is to clear the FX backlog.
Given that Nigeria’s external reserves have been steadily increasing over the past month, the pressure on the naira/dollar exchange rate is progressively easing.
According to data from the CBN, foreign currency reserves rose by 3.62 percent to $34.37 billion as of March 12, 2024, compared to $33.17 billion recorded at the beginning of February 2024.
Additionally, the CBN reported a significant surge in Diaspora remittances, which skyrocketed by 433 percent to $1.3 billion in February, compared to $300 million in January
Meanwhile, the Special Adviser on Information and Strategy, Bayo Onanuga, has cautioned currency traders speculating on foreign exchange to sell their dollar holdings, stating that the naira is expected to increase in value soon.
He advised speculators to sell off their dollars to prevent potential losses swiftly.
Onanuga said, “With backlog FX settled, Naira is set to appreciate further, faster. Currency speculators should quickly dump their stock of dollars to avoid sorrows and tears.
On Wednesday, the naira closed trading at 1,410/dollar at the parallel market and N1,492 at the official Nigerian Autonomous Foreign Exchange Market, according to data compiled from the FMDQ Securities Exchange.
The gain recorded by the naira at the official market represents an appreciation of N68 or 4.5 per cent, from the N1,560/$1 recorded on Tuesday at NAFEM, and a gain of 13.5 per cent or N190 at the parallel market.
The naira has been gaining lately as speculators begin to dump their dollar stocks, following waning demand by prospective buyers amid CBN clampdowns.
A string of circulars by the Central Bank of Nigeria in recent weeks and months have helped to plug leakages and blocked loopholes previously explored by currency speculators and racketeers.
Also, the recent clampdowns on the activities of illegal BDC operators in Lagos, Abuja and Kano by the operatives of the Economic and Financial Crimes Commission have helped to reduce the volatility of the naira.
