“Naira Hits 8-Week High at N1,309/$1 as CBN Boosts Dollar Supply”

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Over the past fortnight, the Central Bank of Nigeria and other banking institutions have bolstered dollar supply to the foreign exchange market by $2.5 billion, resulting in the naira strengthening to N1,309 against the United States dollar.According to official figures from the FMDQ Securities Exchange, the naira closed at N1309/$1 on Thursday, up from the previous day’s rate of N1300/$1.

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Despite this improvement, the naira remains at an eight-week low against the US dollar as it continues to gain ground.

Trading activities were halted on Friday due to a public holiday.Similarly, forex transactions at the Nigerian Autonomous Foreign Exchange Market surged by 106%, reaching $857 million by the close of trading on Thursday, marking the highest level since the Central Bank implemented its new forex policies.

This represents the largest turnover since 2021, with the closest figure being $760 million recorded on June 2nd, 2022.

The average daily forex turnover in March stood at around $220 million, compared to $177 million in daily average forex turnover this year.

The CBN conducted a total sales of $1 billion in the penultimate week.In FX trading, the intraday high closed at N1392 on Thursday, up from N1,460 per dollar on Wednesday, while the intraday low appreciated to N1,250 on Thursday compared to N1,200 on Wednesday.

The liquidity in the forex market has been attributed to a series of policies implemented by the CBN, including the unification of exchange rate windows, liberalization of the FX market, clearance of FX backlog obligations for banks and airlines, and various other reforms.

Forex turnover is a crucial metric in the financial world, indicating the total value of all foreign exchange transactions completed within a specific timeframe, providing insights into market liquidity and vibrancy.

On the official end of the market, the CBN addressed suspected cases of excessive foreign currency speculation and hoarding by Nigerian banks, and completed the payment of $1.5 billion to settle obligations to bank customers, effectively clearing the residual balance of the FX backlog.

At the parallel market, the naira continued its appreciation, with the US dollar selling at N1,280.

The black market saw the US dollar trading between N1,280 to N1,305, following recent foreign exchange policy measures by the Central Bank of Nigeria.

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