The naira recovered after a week of losses on Wednesday, thanks to a 62.81 percent increase in dollar supply on the official foreign currency (FX) market.
According to data from the FMDQ Securities Exchange Limited, the naira gained 0.76 percent after trade on Wednesday. The dollar was quoted at N1,608.73 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), down from N1,621.12 on Tuesday.
The amount of money offered by willing vendors and buyers rose from $166.34 million on Tuesday to $270.81 million on Wednesday, a 62.81 percent rise.
On Wednesday, FX market players quoted the dollar at a high rate of N1,645 as opposed to N1,635 during intraday trade. The intraday low was N1,399.04 on the same day that Tuesday’s closing price of N1,546 per dollar occurred.
The naira traded at N1,610 per dollar on Wednesday at the parallel market, popularly referred to as the black market, down from N1,600/$ on Tuesday.
According to dealers, the pressure on the Naira has increased over the past week due to a high demand for dollars from people paying for their school tuition and summer vacations.
Tuesday saw a four-month low for the value of the Nigerian Naira against the US dollar due to robust demand on the government-run foreign exchange market. On March 8, 2024, the naira had its lowest trading value of N1,627.40 per dollar.
Operators of Bureau De Changes (BDCs) in the nation have appealed to the Central Bank of Nigeria (CBN) to step up its intervention in the foreign exchange (FX) market in an effort to reduce excessive volatility.
They made the call through the Association of Bureau De Change Operators of Nigeria (ABCON) president, Aminu Gwadabe, who responded to TNC’s inquiry with a statement.
The naira has dropped to a new low of N1621 per US dollar at the NAFEM window, according to Gwadabe, despite major interventions by the CBN, including the infusion of millions of dollars into the interbank market.
He applauded the CBN for starting to sell foreign exchange to BDC operators, acknowledging that this policy is an important instrument for reducing volatility in the retail market.
He did, however, stress the need for more forceful measures and urged the CBN to work more closely with BDCs, citing them as essential for preserving sufficient liquidity and lowering volatility in the retail FX market.
“The BDCs remain the most effective tool of foreign exchange policies of the apex bank,” Gwadabe claimed. “We offer price stability in the retail segment of the market along with an effective mechanism for monitoring demand,” he added.
