The Nigerian Naira experienced a remarkable surge against the US dollar, reaching a monthly high of N780.14/$1 at the official market on Friday. This notable increase of 27.77% from the previous close sets a new benchmark in the currency’s recent performance, reflecting positive developments.
The Central Bank of Nigeria (CBN)’s proactive measures, particularly the clearance of its FX backlog, have instilled confidence in investors regarding the Naira’s stability. Market analysts view this move favorably, recognizing it as a positive step to strengthen the currency.
Data from the NAFEM, the official forex trading platform, underscored this upward trend, revealing a Naira gain of N216.61 from Thursday’s close of ₦996.75. This surge surpassed the previous record high of ₦776.14 set on November 3rd.
Despite this official market success, the Naira faced volatility throughout the day, reaching an intraday high of ₦1096.17/$1 and a low of ₦700.00/$1. The day’s forex turnover at the closing stood at $84.02 million, marking a 63.24% decrease from the previous day.
In contrast, the parallel forex market witnessed a weakening of the Naira, depreciating by 3.54% to ₦1130/$1, while peer-to-peer traders quoted rates around ₦1100/$1.
The CBN’s initiative to clear the backlog of foreign exchange forward contracts played a pivotal role in this recovery. This action is expected to alleviate challenges in the business sector and stimulate economic activity.
Nigeria, grappling with dollar shortages since the departure of foreign investors during low oil prices, views the recent efforts by the CBN and the anticipated $10 billion inflow, as announced by Finance Minister Wale Edun, as crucial steps to address these challenges.
Industry experts, including Toye Folosho from the Manufacturers Association of Nigeria, commend the CBN’s actions, anticipating positive impacts on sectors like manufacturing, which have struggled with procuring raw materials and machinery.
Gabriel Idahosa, deputy president of the Lagos Chamber of Commerce and Industry, applauds the move, emphasizing its potential to restore confidence in the traditional market, attract portfolio investors, and encourage foreign direct investments.
