Naira gains against dollar at official market

On Thursday, the Nigerian naira rose slightly versus the US dollar at the Nigerian Autonomous Foreign Exchange Market, closing at N1,498.25/$, up from N1,503.38/$ the day before.

This occurred as the Central Bank of Nigeria issued a series of circulars on Thursday aimed at combating foreign exchange racketeers and financial services operators who engage in harsh practices. The three circulars were dated February 14, 2024.

The CBN’s initial circular prohibited banks from paying Personal Travel Allowance to its customers in cash. In a second circular, it also requested that international oil corporations refrain from repatriating all of their money to their parent companies at once. In the third circular, the apex banks reviewed their standards to prevent under-invoicing of exports and over-invoicing of imported goods.

The circulars came as the naira closed near 1,500/dollar in the official market on Thursday. This was despite a decline in dollar supply from commercial banks in the spot FX market.

According to data from the FMDQ exchange securities, supply grew by $292.3 million to $381.92 million on Tuesday, up from $89.61 million on Monday. However, it decreased to $117.87 million on Wednesday.

READ ALSO: Naira crashes against dollar, exchanges for N1,600/$

On Monday, the naira began at an all-time low of N1,534/$, indicating major implications for the cost of goods and services.

The naira rose modestly on Tuesday to N1,499/$, then dipped to N1,503.38/$ at the close of trading on Wednesday before recovering to N1,498/$ at the conclusion of business on Thursday.

On the parallel segment of the foreign currency market, the Naira dropped to N1,600 per dollar. Thursday’s rate is around N97, or 6.45 percent higher than the N1,503/$ at the start of the week.

Checks show that Nigerians have continued to contact black market dealers despite the Central Bank of Nigeria’s efforts to reduce speculation.

In recent times, the naira has deteriorated beyond financial experts’ expectations.

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