FG Pledges More Dollar Supply To Stabilise Naira as It Exchanged For N800 to a Dollar
- The federal government has said it will inject more dollars into the economy to strengthen the naira
- The Presidential spokesman, Dele Alake, revealed the government’s plan in Paris
- He said the move is to boost the value of the naira and shore up foreign investors’ confidence in the economy
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The Nigerian government has announced plans to inject some foreign exchange into the economy to strengthen the value of the naira as market forces stabilize.
Dele Alake, Special Adviser to President Bola Tinubu, revealed the plans on Wednesday, June 21, 2023, while speaking with reporters in Paris.
Naira recovers at the black market
Alake’s statement comes as the naira is experiencing a remarkable recovery against the dollar in the parallel market.
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The naira traded at an average rate of N750 to a dollar on Wednesday, June 21, 2023, at the black market, an increase of 2.82% compared to the previous day’s trading session, where it exchanged at N780 to the dollar.
Daily Trust reports that $788 million has been recorded as total turnover in the official Investor & Exporter window, one week after the Central Bank of Nigeria (CBN) announced the unification of the exchange rate.
Alake said:
“However, in the short term, we have noticed and expected that there will be a slight spike in demand, which would affect the value of the naira viz-viz the dollar. So, apart from the immediate, short, and long-term positive effects of that unification policy, there could be a need to inject direct foreign exchange into the economy to shore up the value of the naira while market forces stabilize. And in the short run or medium term, there is going to be when the effects of this policy begin to mature.”
Investors welcome Tinubu's policies
According to the presidential aide, Tinubu’s policies in the last three weeks have encouraged the international community and investors to become enthusiastic about Nigeria and have boosted the economy.
Alake also said heads of state and international financial firms had shown interest in meeting with Tinubu to think of areas of cooperation with the new government.
The spokesman hoped that many foreign investors who left Nigeria due to restrictive currency policies would return with new economic measures established as Nigeria embarks on a thorough FDI drive.
Naira experiences volatility
Since the naira was devalued one week ago, the naira-to-dollar rate has been volatile and plunged by 29% to N664 to a dollar on the first day.
The naira ended the week marginally stronger at N664 to a dollar, dropping later to N702 to a dollar.
The I&E window closed on Monday, June 19, 2023, at N770.3 to a dollar and reopened the following day at N756.6, and continued the volatility ever since.
The official rate reached parity with the black market rate for the first time in five years.
However, the highest daily rate was recorded briefly on Wednesday, June 21, 2023, when the naira traded at N815 to a dollar.
CBN readjusts the exchange rate to N645 to a dollar as black and official market rates merge
Legit.ng reported that the Central Bank of Nigeria (CBN) readjusted the exchange rate on its website to N645 to a dollar following the currency's fall in both the black and official markets on Tuesday, June 20, 2023.
At the close of trading, the Nigerian currency traded at N770 to a dollar at the Investors and Exporters (I&E) window, unifying for the first time in eight years.
The apex bank had pegged the local currency at N545 to the dollar as the naira rallied N660 to a dollar in the I&E window.
Source: Legit.ng
