The Nigerian Naira showed resilience as it appreciated against the US dollar in the official foreign exchange market. According to official data from FMDQ, the Naira strengthened to N844.85 per dollar at the close of business on Monday, marking a 5.15% increase from the previous rate of N888.35 per dollar.
This positive shift marks the second instance of the country’s domestic currency gaining strength against the US dollar in the official market. However, the parallel market told a slightly different story, with the Naira experiencing a marginal drop, exchanging at N1,240 per dollar on Tuesday, compared to N1,235 per dollar on Monday.
The forex turnover at the close of trading stood at $111.76 million, reflecting an 18.91% decrease from the previous day. Despite this dip, the Naira’s upward movement against the US dollar in the official market is a significant marker of its resilience.
Governor of the Central Bank of Nigeria, Olayemi Cardoso, expressed optimism about the country’s exchange rate, foreseeing a reduction in exchange rate pressures by 2024. Speaking to the National Assembly joint committee on Banking and Insurance, Cardoso stated, “Exchange rate pressures are also expected to reduce significantly with the smooth functioning of the foreign exchange market.”
This development comes in the wake of the Central Bank’s FX reforms introduced on 14th June, which have led to fluctuations in the Naira’s performance in the forex market.
The Naira’s fluctuating position in the forex market underscores the complexities and dynamism of Nigeria’s currency landscape in the face of global economic forces. As the Naira continues to navigate these challenges, the market remains poised for further developments that could shape the country’s economic trajectory.
The Naira’s resilience in the face of global currency dynamics not only bodes well for Nigeria’s economic outlook but also serves as a testament to its enduring strength in the global financial arena.
