A few days after security personnel stormed several Bureau De Change (BDC) hubs in Abuja, Lagos and Kano, the naira has continued to strengthen on the black-market strengthening to N640 per dollar.
Recall that at the parallel market last week, the naira traded at N710 to the dollar with the new rate indicating the naira’s increase of N70 to the dollar in a matter of days.
Although there is a local and global dimension to the pressure on the naira, the demand for foreign exchange for goods and services has remained constant.
Since Monday, August 1, the naira has strengthened against the US Dollar significantly more easily in all facets of the foreign exchange (FX) market.
The Nigerian currency strengthened on the official market by 0.03% to settle at N428.88 to the dollar on Monday, according to data on FMDQ OTC.
The exchange rate at the official market appreciated on Wednesday, 3rd August 2022 by 0.34% to close at N429.2 to a dollar as against the N430.67/$1 recorded on Tuesday, 2nd August 2022.
The opening indicative rate closed at N427.9/$1 on Wednesday, 3rd August 2022 from N427.75/$1 recorded in the previous trading session.
Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N429.2/$1, while it traded as low as N414/$1 during intra-day trading.
A total of $123.78 million in FX value exchanged hands on Wednesday, which is 21.9% lower than the $158.68 million that was traded in the previous trading session
Similarly, in the peer-to-peer market, the naira rose to N616.66/$1 on Thursday morning from N652.5/$1 recorded on Wednesday, representing a rally of 5.5% compared to the previous day. This is following a shocking depreciation recorded in the previous week when the naira fell to a record N705/$1 as a result of FX scarcity and panic buying
In order to ensure stability, the Central Bank of Nigeria (CBN) frequently intervenes in the official foreign exchange market.
The CBN’s Director of Corporate Communications Department, Osita Nwasinobi said the apex bank would continue to take decisive steps in the forex market to prevent future declines in the value of the naira.
In order to prevent the naira from falling much further, he warned forex purchasers not to fall prey to the speculative practices of some participants in the FX market.