“Dollar is Crashing”: Nigeria’s FX Reserves Hit New High amid Massive Naira Gains
- The minister of Finance, Wale Edun, has said that Nigeria’s FX reserves have risen in the last seven months
- Edun said the nation’s reserves hit a net increase of $2.35 billion monthly since the beginning of the year
- He disclosed that Nigeria’s revenue is experiencing growth and that FX liquidity has improved, impacting the naira positively
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Nigeria’s foreign reserves have witnessed a net inflow of about $2.35 billion in the first seven months of this year.
The minister of Finance and coordinating minister of the Economy, Wale Edun, disclosed this at the Corporate Customers Forum in Lagos on Thursday, September 19, 2024.
Source: Getty Images
The naira is recovering
Edun acknowledged that the increase has played an essential role in stabilising the local currency, the naira, in the FX market.
According to the minister, Nigeria has also seen foreign exchange liquidity, with the gross reserves rising.
He attributed the growth to the government's efforts, adding that the government's revenues are also growing.
Punch reports that the minister said that Nigeria is seeing the gradual elimination of multiple exchange rates.
FX reserves gain $621 million in 10 days
A previous report by Legit.ng disclosed that Nigeria’s firepower against naira depreciation, the foreign exchange reserves, increased by $621.2 million in 10 days following the successful sale of a government-issued domestic dollar bond.
The country’s gross FX reserves rose from $36.24 billion on September 2, 2024, to $36.87 billion by September 12, 2024.
Domestic dollar sale impacts naira’s value
The information is from the Central Bank of Nigeria (CBN).
According to the apex bank, the growth reflects the positive impact of the domestic dollar bond, which the Nigerian government said was oversubscribed by $400 million.
Reports say that on September 2, 2024, Nigeria’s external reserves stood at $36.24 billion but grew in the next 10 days to $36.87 billion as of September 12, 2024.
The naira gains massively
This development follows the massive recovery of the naira against the US dollar on Wednesday, September 18, 2024.
The Nigerian naira has appreciated against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX).
According to FMDQ Securities data, after trading on Wednesday, September 18, the naira closed at N1,539.65/$1 in the official market.
Wednesday's exchange rate is a massive improvement of 7.1% or N116.84 for the naira compared with the previous day’s exchange rate of N1,656.49/$1.
On Tuesday, Legit.ng reported that the naira closed at its worst exchange rate since February 2024.
The recovery on Wednesday was due to an improvement in the supply of foreign exchange to the spot market, which contributed to the growth of the local currency.
Legit.ng observed a 38.9% increase in forex transactions, with $139.48 million recorded on Wednesday, up from $100.39 million the previous day.
The Naira falls to a new low in the official market
Legit.ng earlier reported that the Nigerian naira lost N100 against the US dollar in the official market amid slowing inflation, marking the second month inflation will ease.
Information from the Nigerian Autonomous Foreign Exchange Market (NAFEM) shows that the naira sold at N1,656 per dollar on Tuesday, September 17, 2024, higher than the N1,546 it traded on Monday, September 16, 2024.
FMDQ Exchange data shows that the currency dealers quoted the naira at a high of N1,665 and a low of N1,565 per dollar.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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Source: Legit.ng
