New Exchange Rate Emerges as Naira Gains against Dollar at N1,453 in Official Market
- The naira gained about N82 against the US dollar on Thursday, March 21, 2024, after trading at N1,453.82 per dollar
- The current rate represents a 10 per cent gain by the currency as the foreign exchange supply rose to $288.47
- The development came after the Central Bank of Nigeria (CBN) said it has cleared all valid Forex backlogs of about $7 billion
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency, the naira, gained over N80 against the US dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, March 21, 2024, following the announcement by the Central Bank of Nigeria (CBN) that it had cleared all valid FX backlogs.
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Data from NAFEM shows that during the mid-day trading, the naira traded at N1,382.35 per dollar before closing at N1,453 per dollar as against the rate it closed on Wednesday, March 20, 2024, at N1,536.83.
Naira gains 10% against the dollar
The development represents a 10% gain by the Nigerian currency against the dollar as Forex inflow rose to $288.47.
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Traders quoted the intraday exchange rate at N1,598.00 and a low of N1,300 per dollar.
On Wednesday, March 20, the Nigerian apex bank revealed that it cleared the backlog of $7 billion in claims, CBN’s Acting Director of Corporate Communications, Hakama Sidi Ali, said in a statement.
CBN offsets FX backlogs
Per Ali’s statement, the bank included $1.5 billion to offset obligations to bank customers. She stated that independent auditors from Deloitte Consulting assessed the transactions to ensure that only genuine claims were paid.
Leadership reports that the CBN governor, Olayemi Cardoso, has said that clearing the FX backlog, which analysts believe was hurting the naira, was a priority.
Cardoso said:
“We prioritised clearing the FX backlog to restore credibility and confidence in the Nigerian economy.
“We needed to go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is behind us.” Cardoso emphasised the priority of clearing the FX backlog to enhance credibility and confidence in the Nigerian economy.
Naira falls slightly in the black market
Meanwhile, the Nigerian currency fell at the parallel market at N1,480 per dollar as against the N1,450 it traded on Wednesday, March 20, 2024.
According to reports, the margin between the official and black market widened to about N97,65 per dollar from the N42.61 per dollar seen the previous day.
Analysts believe that the pressure on the naira is gradually easing as Nigeria’s external reserve has displayed some growth in the past month.
CBN data shows that foreign reserves increased by 3.62% to $34.37 billion as of March 12, 2024, compared to $33.17 billion recorded at the beginning of February 2024.
The apex bank also reported an uptick in diaspora remittances, which hit 433% to $1.3 billion in February, compared to $300 million in January 2024.
On Thursday, presidential spokesman Bayo Onanuga asked speculators to dump their dollars to avoid further losses as the naira is poised to continue to gain,
Financial analyst and Business Editor at the Nigerian Xpress Newspaper, Emeka Okoroanyawu, commended the apex bank's efforts in ensuring that all valid claims to FX are settled, as that would set the naira on a new pedestal.
He said.
"All we had in the past were cries that the naira was being hurt by all these debts and obligations accumulated over time by the previous government. Now, we will see the true value of the naira as speculators will be forced to sell their stash of forex and thereby improve the value of the naira."
Naira gains against all currencies
Legit.ng earlier reported that the Nigerian currency recovered below the N1,600 per dollar in the official market, leaving the N1,600 threshold it has occupied for two weeks.
The naira closed in the Nigerian Autonomous Foreign Exchange Market (NAFEM) at N1,572.82 per dollar on Monday, March 18, 2024, as against the N1,602.72 it closed on Friday, March 15, 2024.
The recent rate is the first time the Nigerian currency closed below the N1,600 mark since March 5, 2024, when it began trading above N1,600.
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Source: Legit.ng
