Naira Makes Strong Gains Against Dollar at Official and Black Markets
The Nigerian naira has ended the week on a positive note, experiencing a significant appreciation against the US dollar at both official and black markets. According to FMDQ data, the naira strengthened to N1,574.20 per dollar on Friday, representing a gain of N19.42 against the dollar compared to the previous day’s rate of N1,593.62.
At the black market, the naira also gained N5 to close at N1605 per dollar on Friday, down from N1610 the previous day. Dayyabu Ashiru, a Bureau de Change operator in Wuse Zone 4, attributed the price crash to a change in market dynamics, stating that the rate sold for N1,625 per dollar in the morning but dropped to N1605 by evening.
On a week-on-week basis, the naira gained N42.88 at the official market, moving from N1617.08 exchanged against the dollar last Friday to N1,574.20. This upswing in the naira’s value comes as foreign exchange transaction turnover increased to N323.11 million on Friday, up from $61.9 million three days ago.
The gains recorded by the naira against the dollar are attributed to the Central Bank of Nigeria’s (CBN) commencement of the Retail Dutch Auction System on Wednesday. The apex bank sold $876.26 million to 26 banks at an N1,495 per dollar rate, indicating a significant injection of foreign exchange into the market.
The naira’s appreciation against the dollar is a welcome development for Nigeria, which has been grappling with currency volatility and a shortage of foreign exchange. The CBN’s efforts to stabilize the exchange rate and increase foreign exchange availability have yielded positive results, at least in the short term. As the country continues to navigate the challenges of economic recovery, the naira’s gains against the dollar will be closely watched by investors and economists alike.
