Naira Stands Strong Against US Dollar as CBN Begins $61m Settlement to Airlines
- The naira started the week on a positive note, recording gains in the official and unofficial markets
- Data shows that the Nigerian currency gained 1.47% in the official market and 0.80% in the unofficial market
- This is on the back of a recent move by the CBN to settle foreign airlines' funds through various banks
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The naira has shown resilience against the dollar, starting the second week of the year on a good note.
Source: Getty Images
Official data by the Nigerian Autonomous Foreign Exchange Market (NAFEM) shows that the naira appreciated by 1.47% to close at N856.57 per dollar on Monday, January 9, 2024.
This is against the N869.13 per dollar it closed the previous day.
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
During the trading day, the intraday high was quoted at N1,185 per dollar, while the intraday low was N720 per dollar, according to the FMDQ.
In a similar operation, the naira also gained in the unofficial market to quote at N1245 per dollar on Monday.
This amount signifies a 0.80% appreciation from what its closed the previous day.
CBN settles $61.64m Forex backlog
The gain witnessed in the market comes amid reports that the Central Bank of Nigeria (CBN) disbursed $61.64 million to foreign airlines through various banks.
This brings the total backlog of forex cleared in the last three months to $2 billion, according to a New Telegraph report.
Hakama Sidi Ali, CBN acting director of the corporate communications department, said:
“In fulfilment of its commitment to eliminate the backlog of pending matured foreign exchange in Deposit Money Banks (DMBs), the Central Bank of Nigeria (CBN) has recently disbursed approximately US $61.64 million to foreign airlines through various banks.”
On how the development would impact the naira, she said:
“It is anticipated that this initiative by the CBN should provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigeria economy.”
Samuel Oyekanmi, a macroeconomic analyst, said the development restores some confidence in the Nigerian FX system for foreign investors, especially in the aviation industry.
He added:
“It also sends a signal of FX liquidity in the economy, hence reducing the pressure on the exchange rate both at the official and parallel FX market.”
"Clearing backlogs": $2.2bn Afreximbank loan lifts Nigeria's external reserve, reverses naira's loss
Earlier, Legit.ng reported that foreign exchange reserves increased to $33.042 billion as of January 3, 2024.
This was up from $32.912 billion on Friday, the final trading day of 2023.
According to reports, the development coincided with the reception of the African Import-Export Bank (Afreximbank) loan announcement, which has helped boost reserves.
According to the minister of finance, Wale Edun, in an Arise TV interview, the amount represented the bank's first tranche of the $3.3bn facility to resolve the acute FX shortage that has hampered the economy.
PAY ATTENTION: Donate to Legit Charity on Patreon. Your support matters!
Source: Legit.ng
