Naira Gains Balance Against Dollar in Official Window as CBN Launches New FX Code

• The naira appreciated slightly against the US dollar in the official foreign exchange market on Wednesday, January 22, 2025
• It opened trading negatively at 0.19% at N1,552.50 per dollar and quickly appreciated by 0.01% at N1,552.58, indicating a slight gain
• Analysts explained that the naira may have finally gained its footing against the dollar as it continues to hover between the N1,550 per dollar threshold

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

As volatility levels moderated, the Nigerian currency may have found its footing against the US dollar.

The local currency has been hovering around the N1,550 threshold over the past week, suggesting it may have stabilised at this value in the foreign exchange market.

The naira finds its rhythm against the dollar

Throughout January 2025, the naira mainly traded between N1,548 and N1,552 in the official market, with the spot rate not exceeding N1,555 per dollar.

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Analysts believe the current exchange rate may reflect the naira’s actual value after President Bola Tinubu’s government floated it in 2023.

Data from the Nigerian Foreign Exchange Market (NFEM) and FMDQ Exchange show that the naira has never crossed the N1,555 per dollar threshold for five days in a row, indicating some level of stability.

Experts believe local currency has finally found value; however, a considerable gap exists between the parallel and official windows.

Experts predict stability for the naira.

“There seems to be some stability in the FX market because the naira has traded in the N1,500-plus threshold, which is encouraging. It means Nigerians and the government can plan with the current rate,” Janet Ogochukwu, a senior banker and economist, said.

On Wednesday, the naira marginally appreciated by 0.01% at NFEM to trade N1,552.58 per dollar in the official window, up from N1,552.78 the previous day.

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The naira opened trading negatively in the official window at N1,552.50 per dollar, representing a 0.19% value.

Currency traders quoted the dollar spot rate at a high of N1,554.40 and a low of N1,549.88.

CBN launches new FX code

The development comes as the Central Bank of Nigeria (CBN) said it approved the release of the Nigerian Foreign Exchange FX Code, billed for launch on January 28, 2025.

The new code would serve as a rulebook for the banking industry, boosting the ethical conduct of authorised FX dealers in the Nigerian foreign exchange market (NFEM).

Bank CEOs must sign off on new FX code

CBN disclosed that it would launch the code at its Head Office Auditorium in Abuja on Wednesday, January 28, 2025.

In November 2024, the apex bank introduced the revised guidelines for the NFEM to boost governance and transparency.

An essential feature of the guideline requires bank bosses, their CEOs and Chief Compliance Officers to adhere to the FX Code of Ethics and Conduct.

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Access, Zenith, other Nigerian banks begin Sale of BTA, PTA

Legit.ng earlier reported that some commercial banks resumed selling their customers Personal Travel Allowance (PTA) and Business Travel Allowance (BTA), showing a shift in FX availability after a prolonged supply shortage.

The development came as financial institutions adjusted to market demands and the Central Bank of Nigeria (CBN) policy changes.

Nigeria’s oldest financial Institution, First Bank, announced the resumption of FX sales for various international transactions.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng