Naira Finally Rises Against Dollar as Pressure Mounts in Official, Black Market

• On the official foreign exchange market, the value of the naira increased in relation to the dollar for the first time since last week
• Data reveals that the naira closed at N1,678.93 on Tuesday, November 19, 2024, reflecting an N11.77 appreciation in its value against the dollar
• Due to a growing supply deficit and strong demand for the dollar, the naira faced additional challenges in the unofficial market

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

For the first time since last week, the naira's value increased against the dollar on the official foreign currency market.

According to FMDQ data, the naira appreciated from N1,690.37 to N1,678.93 per dollar on Monday and N1,678.93 on Tuesday, representing an N11.77 increase in its value relative to the dollar.

This indicates that the official market has seen the naira's value increase relative to the dollar for the first time since November 13, 2024, when it closed at N1,645.

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However, the naira held steady at N1,745 to the dollar on the black market on Tuesday, matching Monday's exchange rate.

The turnover of foreign exchange transactions decreased from $296.63 million on Friday of last week to $173.14 million on Monday.

While the US dollar index has demonstrated strength, the Nigerian currency has dropped 70% since the middle of last year.

Analysts said the naira will likely face more selling pressure as demand for foreign exchange rises, driven mainly by foreign tuition, fuel imports, and Christmas vacations.

The naira faced more headwinds in the unofficial market amid high demand for the dollar and a widening supply gap.

Charles Abuede, a financial analyst advised on how to the naira can maintain its balance agaist foreign currencies.

"If Nigeria can address insecurity and terrorism concerns, oil theft and pipeline vandalism, we can begin to see an increase in our crude oil production to above 2mbpd or even close to 2.5mbpd to aid the increase in fx receipt."

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Legit.ng earlier reported that the naira depreciated by 2.31% or N38.12 on Monday, November 18, 2024, in the Nigerian forex market to close at N1,690.37 per dollar, relative to N1,652.25 on Friday, October 15, 2024.

Data from the FMDQ Exchange showed that forex supply in the official market stood at $173.14 million, representing a 42% decline from the $296.63 million on the previous trading day.

Willing buyers and willing sellers quoted the dollar at a high of N1,699 and a low of N1,633 per dollar.

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

Source: Legit.ng