The Nigerian currency, the Naira, experienced a marginal appreciation, reaching N764.86/$1 at the close of business on Friday. This favorable development comes after the Central Bank of Nigeria (CBN) announced the removal of the foreign exchange (forex) restriction on 43 items. FMDQ exchange data revealed this information on Saturday.
Positive Trend at the Official Market
Starting the day at N770.16/$1, the forex rate concluded the day with a closing rate of N776.8/$1 at the official market. Consequently, this indicates an increase in the value of the Naira compared to the previous day’s rate of N776.8/$1.
Steady Rates in the Parallel Market
In the parallel market, however, the forex rate remained unchanged, with an average rate of N1030/$1. This signifies that the Naira maintained its stability in this market segment.
CBN’s Efforts to Address Forex Crisis
The recent action by the Central Bank of Nigeria is part of its renewed commitment to tackle the ongoing forex crisis in the country. In line with this objective, the apex bank lifted forex restrictions on various items, including rice, cement, and 41 other commodities.
CBN explained that this move is aimed at reducing the demand for forex in the parallel market and achieving a unified forex pricing system. The restrictions previously imposed had compelled importers to resort to the parallel market, leading to excessive demand for forex. These circumstances resulted in the weakening of the parallel market exchange rate and subsequent price inflation.
By removing these restrictions, CBN aims to create a more stable forex ecosystem, promote economic growth, and ensure a balanced supply and demand of foreign exchange in the country.
