In a notable turn of events, the Nigerian naira strengthens against the dollar, as it continues its upward trajectory against the United States dollar, reaching N1,136/$ at the official market and N1,050/$ at the parallel market by the close of trading activities on Monday. This surge has sparked predictions among traders of a potential further decline in the dollar’s value in the coming days.
Data from the FMDQ Exchange, overseeing the Nigerian Autonomous Foreign Exchange Market, revealed a significant 6.1% increase in the naira’s value, rising from N1,205/$ recorded on Friday to N1,136/$ on Monday. This surge comes amidst a slight drop in total daily turnover to $251.60 million on Monday, down from $281.34 million recorded on Friday.
The improved exchange rate follows a series of foreign exchange directives implemented by the Central Bank of Nigeria (CBN) aimed at stabilizing the naira. These measures include the resolution of all valid foreign exchange backlogs, totaling $7 billion, as pledged by CBN Governor Olayemi Cardoso. Additionally, the total inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) have surged by 41.7% to $3.75 billion, the highest level since March 2019.
Despite the positive outlook, currency traders at the unofficial market, particularly at the popular Wuse Zone 4 market, have voiced concerns about dwindling profits. Some traders, like Malam Ibrahim, noted buying the dollar between N950 and N980 and selling it between N1,010 and N1,020. While the demand for the dollar remains low, traders foresee the rates dropping below N1,000 per dollar, attributing the decline to sluggish business and the impact of CBN’s exchange rate policies. As the naira continues its upward trend, stakeholders closely monitor market dynamics amidst expectations of further developments.
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