The naira strengthened by N125 over the weekend to reach N1,275/$1, indicating that it is starting to gain strength versus the US dollar. The new exchange rate is 9.8% more than what it was trading for at the end of Friday’s trading session, which was N1,400 to the dollar.
This occurred when the Senate, via its Committee on Finance, demanded that all pertinent parties make coordinated measures to save and maintain its stability. The Senate declared that coordinated actions were desperately needed to address the volatility and ongoing devaluation of the Naira.
Currency dealers at the well-known Wuse Zone 4 market on Sunday attributed the market’s trading volatility to the variations in the exchange rate.
The government, they continued, must either to choose to increase the currency value or devalue for market stability. The operators did not provide a selling rate for Sunday, citing the absence of trading activity. A trader, Malam Yahu Ibrahim, said operators were taking too much risk trading the naira due to its instability.
He said, “We take risks against ourselves every day because I don’t know how they are doing it, the naira is just swinging. “If the government wants to bring down the dollar totally, they should do it or if they want the naira to fall, they should do it and not allow it to fluctuate. It is killing businesses.”
“We are not even seeing the effect of the CBN dollar sale to BDCs, we are not seeing any effect.”
Another trader, Abubakar Taura, had in an earlier interview, expressed caution in trading activity, citing ongoing concerns that the CBN might take some drastic measures to stabilise the naira.
He noted that they couldn’t guarantee or predict what the rate would be on Monday (today) due to the volatile nature of the market.
The recovery in value coincides with plans by the Association of Bureaux De Change Operators of Nigeria to unify the retail end of the foreign currency market.
ABCON President, Aminu Gwadabe, said the move would tackle volatility and boost regulatory compliance within that segment of the market.
He said, “Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to easily locate BDCs offices for effective and seamless transactions.”
Before the marginal gain, the naira had lost 26.2 per cent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023, on the parallel market, popularly called the black market.
Last Monday, the Central Bank of Nigeria approved the allocation of $15.83m to 1,583 BDC operators to enhance liquidity in the unofficial market. Meanwhile, data from FMDQ securities exchange showed that the naira continued its downward trend against the greenback at the official foreign exchange window, closing at N1,339/$ on Friday.
This represents a 2.24 per cent depreciation when compared to the N1,309/$ quoted on Thursday, highlighting a full week of depreciation at the official market. Trading between willing buyers and sellers reached a total of $1bn at the Nigerian Autonomous Foreign Exchange Market.
