Naira Loses to Pound Sterling as CBN Governor Clears Air on Depleting Reserve

• The Nigerian naira has declined against the British pound, according to information from the CBN
• The local currency also declined against the dollar last week after the CBN governor commented on reserves
• The CBN governor had assured that the local currency gain was not a result of the depleting foreign reserves

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Nigeria’s currency last week witnessed slight pressure against major foreign currencies as the British pound pushed back against the local currency, which closed the week on Friday, April 19, at N1,431/£.

On a week-on-week analysis, the record shows that the naira, which closed the previous week at N1,418/£, lost N13.66/£ in one week.

CBN data showed that the naira to the pound commenced the week at a closing rate of N1,446/£ on Monday, April 15, but eventually improved performance, selling for N1,394/£ by Wednesday, April 17.

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However, by Thursday, April 18, the local currency resumed its loss again, falling by N52/£ to close at N1446/£ and ending the week on Friday, the 19th, at N1,431/£.

In a similar report, Legit.ng reported that the naira had depreciated again in the black and official markets against the US dollars.

In the black market, the naira traded for N1,230 per dollar on Friday, April 19, 2024, declining by 17% compared to the N1,050 it traded the day before.

The fall in the local currency came after the CBN governor, Olayemi Cardoso, explained why the naira’s rise coincides with falling reserves

During the ongoing spring meetings of the World Bank and the IMF, the CBN governor reassured that the apex bank is not using Nigeria's foreign reserves to protect the naira.

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Cardoso stated that his team at the apex bank is committed to fostering a foreign currency market based on willing sellers and buyers.

Additionally, he stated that 'Ways and Means' (federal government borrowing from CBN) is no longer problematic, especially since the fiscal authorities securitised the outstanding debt.

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Legit.ng reported that on Friday, April 12, 2024, after a three-day holiday, one dollar sold for N1,125 on the streets, showing a slowing fall in demand.

There was no change in the currency from the N1,120 it closed on Thursday, April 11, according to multiple traders who said that trading volumes were inconsistent during the holidays.

Because banks were closed for the holiday, transactions happened occasionally, which caused the market rates to vary.

Source: Legit.ng