Dollar Rate: The Nigerian naira has sustained its upward trend against the United States dollar, reaching N1,136/$ at the official market and N1,050/$ at the parallel market by the end of trading activities on Monday.
Traders anticipate a further decline of the dollar to below N1,000 before the week concludes.
Data from the FMDQ Exchange, overseeing the Nigerian Autonomous Foreign Exchange Market, indicates a 6.1% surge in the naira from N1,205/$ on Friday to N1,136/$ on Monday at the official foreign exchange market. Despite a slight decrease in total daily turnover to $251.60 million on Monday from $281.34 million on Friday, both intra-day high and low improved significantly.
This improved rate follows a series of foreign exchange directives by the Central Bank of Nigeria aimed at stabilizing the naira, including the resolution of all valid foreign exchange backlogs, amounting to $7 billion.
Additionally, data from the FMDQ reveals a 41.7% increase in total inflows into the NAFEM to $3.75 billion, compared to $2.64 billion in February, the highest level since March 2019 ($6.07 billion).
As part of efforts to control inflation and stabilize the naira, the CBN raised its benchmark interest rate by 200 basis points to 24.75% in February 2024.
Analysts at Afrinvest anticipate continued strengthening of the naira as the CBN intensifies efforts to bolster liquidity in the market.
At the unofficial market, currency traders in Wuse Zone 4 market expressed concerns about declining rates, with some reporting buying at N900 and selling at N940 per dollar.
Last week, Goldman Sachs Group noted that the naira had emerged as the top-performing currency globally in April, with expectations of further gains due to effective policy management by the Central Bank of Nigeria, including significant interest rate increases.
