The naira on Monday appreciated by 5.2 per cent to N1,582.94 against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the FMDQ Exchange.
The appreciation aligns with the heightened efforts of the Central Bank of Nigeria (CBN) to address the persistent depreciation of the Naira to which Nigeria’s apex bank has implemented various measures to stabilise.
These measures include intensifying enforcement actions against informal foreign currency street traders and targeting a well-known cryptocurrency trading platform.
The naira experienced a significant appreciation, reaching a peak of N2,100 against the Pounds (GBP) in the parallel market.
This surge marked a notable increase of 7.62 per cent, with the currency strengthening by N160.00 compared to the previous day’s closing rate of N2,260 against the Pounds.
However, the naira appreciated at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1,650 against the dollar, an increase of 6.06per cent against N1,750 it closed the previous day,
Additionally, the Naira against the Euro traded gained 5.95 per cent, closing at N1850 against the Euro compared to N1960/EUR1 also reported the previous day.
The office of the National Security Adviser, led by Nuhu Ribadu, in collaboration with the CBN, also initiated a joint effort to combat foreign exchange speculation and tackle the issues affecting the country’s economic stability.
In a statement on Tuesday, a spokesperson for Ribadu’s office, Zakari Mijinyawa, said the partnership include coordinated actions with leading law enforcement agencies such as the Nigeria Police Force (NPF), the Economic and Financial Crimes Commission (EFCC), the Nigeria Customs Service (NCS), and the Nigeria Financial Intelligence Unit (NFIU).
Mijinyawa pointed out that the activities of speculators, operating both domestically and internationally through different mechanisms, have played a significant role in the naira’s depreciation, thereby exacerbating inflation and leading to economic instability in Nigeria.
The BUA Group chairman, Abdul Samad Rabiu had described the situation in the foreign exchange market as artificial and manipulative.
Since the unification of the exchange rate windows on June 14, 2023, the naira has experienced high levels of volatility — with the local currency trading as high as N1,770/$ at the parallel market and N1,665.50/$ at the official window on February 23.
However, the apex bank has implemented several reforms to strengthen the naira and boost foreign exchange supply, including placing a limit on the repatriation of proceeds by international oil companies.
Meanwhile, the overnight lending rate contracted by 150 basis points to 24.3 per per cent, in the absence of any significant inflows into the system.
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