The Naira recovered sharply against the US dollar in the foreign currency (FX) market at the start of the week, following a poor performance the previous week.
According to spot FX data from the FMDQ website, the local currency increased by 5.38% and closed at ₦1,552.92 per US dollar on the official market.
US dollar demand pressures lessened at the start of the week, following $50 million in FX auction sales to local banks last week. The Apex Bank has continued to support the naira in an effort to lessen forex market volatility.
Despite the authority’s efforts to keep exchange volatility under control, the naira has been under pressure in foreign markets. According to channel check, exchange rate at the informal currency market worsened at the beginning of the week due to seasonal demand for the greenback.
The October effects in the currency market started taking shape, and this caused informal sector FX demand to stay uptrend. Analysts believe that Nigeria’s latest open window for food imports contributed to depressed exchange rate in the informal currency market.
Today, the naira closed at ₦1,680 to the US dollar amidst plan to feed more than 230 million Nigerians with imported foods to reduce pressure in the markets.
In a move to combat soaring food prices and alleviate the burden of inflation on Nigerians, the Federal Government proposed a temporary zero-duty levy on selected food imports.
The Central Bank of Nigeria released $689.88 million or N903.95 billion at the official exchange rate of N1,309 as of March 31, 2024 to Nigerians for importing food items in the first quarter of 2024.
The market anticipates that the CBN will continue to sell US dollar to authorised dealer banks to boost FX liquidity level in the official currency market.
In the global commodities market, oil prices fell, with Brent Crude decreasing by 2.36% to $77.2 per barrel, while WTI also dropped by 2.45%, closing at $73.7 per barrel.
