No More N956/$: Naira Recovers by 16%, Set for More Gains on Cardoso’s $1trillion GDP Target
- The naira reversed its loss position on Friday, November 24 2023, at the official market
- The Nigerian naira also gained 0.43% in the black market at the end of the day to close at N1,155/$
- Analysts said that clearing the backlog would ensure improved liquidity in the official market
On Friday, November 24, 2023, the naira recovered against the US dollar at the official window.
Data on the Nigerian Autonomous Foreign Exchange Market (NAFEM) showed the naira closed at N794.89/$1, rebounding after a two-day fall.
The amount indicates 16.88% from the N956.33/$ it recorded on Thursday. Consequently, the high and low records for the day were N1,136/$ and N700/$, respectively.
Source: UGC
The turnover, which represents the amount of dollars traded, hit $105.50 million for the day.
Similarly, the unofficial market saw the naira appreciate to the dollar from N1,160/$ to N1,155/$, showing a 0.43% gain.
Meanwhile, there are indications that currency appreciation may be linked with Olayemi Cardozo’s plan to unveil the bank’s monetary policy thrust and economic outlook for 2024.
He also told Nigerian banks to prepare for a new round of banking sector recapitalization as the nation works towards the $1 trillion Gross Domestic Product (GDP) target.
The last banking recapitalization in 2004 saw banks increase their capital base from N2 billion to N25 billion.
The CBN governor at the 58th Annual Bankers Dinner by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos disclosed that the apex bank has paid forex backlogs to about 31 banks.
Samuel Oyekanmi, a macroeconomic analyst, said tranche payments to 31 banks to clear the Forex backlogs plaguing the FX market are necessary.
He, however, said that other critical sectors, like the Aviation industry, still have backlogs to be cleared.
If the bank can clear all backlogs, that would be good, but what will be great is to ensure improved liquidity in the official market, bridging the arbitrage caused by the disparity between the official and the parallel market, and nip the impact of FX shocks on prices in the bud.”
More scarcity ahead as CBN moves to mop up cash to tame inflation, strengthen naira
Legit.ng reported that the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said on Friday, November 25, 2023, that the bank will introduce a set of foreign exchange rules to address the naira crash and achieve exchange rate stability.
Cardoso said the bank would conduct a new round of recapitalization exercises for the banking industry by asking banks to increase their minimum capital base to a new level to support the vision of a $1 trillion economy proposed by President Bola Tinubu.
The CBN boss disclosed this in Lagos during his keynote speech at the 2023 Annual Bankers Dinner of the Chattered Institute of Bankers of Nigeria (CIBN).
PAY ATTENTION: Unlock the best of Legit.ng on Pinterest! Subscribe now and get your daily inspiration!
Source: Legit.ng
