Since the Central Bank of Nigeria (CBN) cleared all foreign currency (FX) backlog, the value of the naira has steadily improved, gaining 4.55 percent against the dollar on increased dollar supply.
According to data from the FMDQ Securities Exchange Limited, the summary of the FX trading auction showed that the naira increased by 4.55 percent as the dollar was quoted at N1,492.61 on Wednesday, stronger than N1,560.57 reported on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM).
Wednesday’s intraday high finished at N1,620 per dollar, which was higher than Tuesday’s closing price of N1,626.50. Additionally, on the same day, the intraday low strengthened to N1,350 per dollar, closing at a higher level than N1,415/$1 on the day before.
From $195.13 million on Tuesday at NAFEM to $268.29 million on Wednesday, the dollar supplied by FX market participants grew by 37.49 percent.
As promised by Governor Olayemi Cardoso, the Central Bank of Nigeria (CBN) announced on Wednesday that it had successfully settled all legitimate foreign exchange backlogs, resolving inherited claims totaling US$7 billion.
This information was communicated via mail in a statement from CBN’s acting director of corporate communications, Hakama Sidi Ali. The remaining amount of the FX backlog was cleared, she said, when the CBN finalised the payment of $1.5 billion to meet obligations to bank clients.
She further said that these transactions were painstakingly examined by independent auditors from Deloitte Consulting to verify the veracity of claims, and that any transactions that proved to be fraudulent were immediately reported to the appropriate authorities for additional examination.
Cardoso stressed how important it is to pay off the foreign exchange debt in order to boost trust and credibility in the Nigerian economy.
Nigeria’s external reserves have grown steadily over the past month, which has eased the pressure on the naira/dollar exchange rate.
The CBN reports that as of March 12, 2024, foreign currency reserves stood at $34.37 billion, up 3.62 percent from $33.17 billion at the start of February 2024
The CBN also revealed a notable increase in remittances from the diaspora, which surged by 433 percent to $1.3 billion in February from $300 million in January.
