The naira rose 13.51% to N895.23 per US dollar at the Nigeria Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ OTC FX platform.
Midweek, the exchange rate surpassed N1,035 because to high FX logs that exceeded entire market supply. Nigeria’s gross external reserves have risen beyond $33 billion as a result of recent inflows. The balance in the country’s foreign reserves has remained below the level at the end of the year, despite increasing FX receipts in recent weeks.
While the official exchange rate rose, the Naira fell 1.23% on the day, closing at N1,230 per US dollar on the parallel market. The central bank has maintained a distance from the forex market by allowing forces of demand and supply to determine the rate for FX users.
The decision which has lasted for 10 weeks now has seen the local currency rising above N1,000 but there has always been a noticeable recovery thereafter the massive depreciation in the official window.
In a note, multi-asset investment banking firm, CardinalStone Partners Limited revealed that the total FX supply by the CBN settled at $9.4 billion in 2023, the lowest since 2016.
“… We see legroom for improving FX liquidity in 2024, which could be instrumental in stimulating foreign inflows”, the firm added.
FX scarcity remains a major undoing in the Nigerian economy, a relatively import-dependent nation without an aggressive FX earnings strategy. Nigeria ranks higher in hydrocarbon sales but without a solid US dollar inflows record.
In the global commodity market, west Texas intermediate (WTI) crude futures advanced by 0.44% to $73.02 per barrel on Thursday. Also, the Brent Crude closed at $78.51 per barrel.
