Dollar Crashes in Official Market as CBN Speaks on Deposit Safety in Banks, Naira Gains
- The naira’s value rose 4.49 per cent in the official window on Tuesday, October 8, 2024, in the official window
- The dollar exchanged for N1,561.76 per dollar as against the N1.635.15 it traded the day before
- The naira, however, crashed in the parallel market, trading at N1,680 on Tuesday, October 8, 2024
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 against the dollar in the official window on Tuesday, October 8, 2024.
The naira rose 4.48% in the official market to close at N1,561.76 per dollar from the N1,635.15 it traded the previous day.
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The naira depreciates in the parallel market
The naira’s value was propelled by the rise in forex turnover in the official market, which hit $253.68 million from $113.12 million.
Data from the FMDQ Exchange shows that currency dealers quoted the spot rate of the dollar at a high of N1,650 per dollar and a low of N1,540 in the official window.
According to data tracked by Legit. ng, the naira depreciated in the parallel segment of the forex market, trading at N1,680 per dollar against the N1,665 it traded on Monday, October 7, 2024.
The naira crashed against the euro in the official market, trading at N1,778.62.
Analysts believe that the rise of naira is caused by traders’ and importers' reduced demand for the US dollar.
CBN assures of funds safety in banks
According to them, reduced demand lifted the pressure on the local currency, causing the naira to rise slightly in the official window.
The development comes amid assurances by the Central Bank of Nigeria (CBN) to the banking public about the safety of their funds in the Nigerian banks.
The CBN’s assurance came amid social media reports that some Nigerian banks are facing stress, leading to the apex bank disclosing that it performs periodic stress tests on financial institutions in the country.
“The Central Bank of Nigeria (CBN) wishes to reassure the public of its unwavering commitment to ensuring the stability and reliability of the Nigerian financial system. The CBN recognises confidence's crucial role in banking operations and wants to affirm that all deposits in Nigerian banks are secure. “The CBN actively ensures that banks adhere,” CBN said.
Naira depreciates, traders, CBN give new exchange rates
Legit.ng earlier, the Nigerian currency, the naira, lost some of its value against the dollar in both official and black foreign exchange markets on Monday, October 7, 2024.
According to data from FMDQ securities, the naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX), which is the official market closed at N1,635.15/$1 exchange rate on Monday.
The exchange rate on Monday is 0.24% or N3.94 against the dollar compared to the previous Friday's closing rate of N1,631.21/$1.
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Source: Legit.ng
