Naira Begins Week on Positive Note against Dollar as External Reserves Rise to 3-Year High
- The Nigerian currency, the naira, appreciated against the US dollar in the official foreign exchange market on Monday, December 23, 2024
- Data from official sources confirms that the naira gained 0.14% to close at N1,539.55 against the dollar
- The development comes amid rising external reserves, which recently hit a three-year high of $40.816 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 naira began the week positively against the US dollar, gaining 0.14% in the official Electronic Foreign Exchange Market System (EFEMS).
The naira appreciated by 14 basis points, closing at N1,539.55 per dollar on Monday, December 23, 2024, an improvement from the previous day’s value.
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Naira gains in value against dollar
Data from the FMDQ Exchange showed that the Central Bank of Nigeria's (CBN) positive intervention sales helped keep the local currency afloat.
The FX market displayed stability and improved liquidity. Analysts say FX transactions were finalised at a high of N1,545 and a low of N1,532 per dollar.
Legit.ng earlier reported that the apex bank sold about $197.7 million to authorised dealer banks to boost the FX level in the market.
According to reports, the FX sales lasted for four out of five days of activities in the financial market, but not enough to hedge the naira against losses last week.
External reserves hit a three-year high
Meanwhile, the latest data from the CBN shows that Nigeria’s gross external reserves have risen significantly as foreign portfolio investors flow through the economy.
The country’s gross external reserves hit $40.816 billion, representing a three-year high.
CBN revealed in a report that FX inflow via the economy rose 3.01% to $22.82 billion, up from $22.22 billion in the second quarter of 2024.
Consequently, net FX inflow into the economy declined by $2.97% to $14.46 billion, down from $14.89 billion the following quarter.
Experts predict new naira exchange rates in 2025
Legit.ng earlier reported that the ready is poised for a rebound in 2025 as analysts forecast higher FX inflows into the economy amid lower petrol and food imports.
They say enhanced oil production and net capital inflows into the economy will spur the naira's value.
Reports quoted Uche Uwaleke, the director of the Institute of Capital Market Studies at Nasarawa State University, saying that the outlook is due to lower petrol and food imports and increased fuel exports, which would be an FX earner for the country.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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