The naira at the weekend slightly recovered against the dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), the country’s official exchange rate window.
The naira recovered to N794.89/$1, after a two day slump in the official market as at last Friday.
According to Data from FMDQ Securities Exchange, a platform that oversees foreign exchange (FX) trading in Nigeria, the rate represents a recovery of 16.88 percent from the N956.33 it recorded on Thursday.
However, the forex turnover, on Thursday, hit $105.50million according to data from NAFEM. The turnover represents the amount of dollars traded at a particular trading day.
Consequently, at the parallel market, the naira sustained its appreciation against the dollar as it appreciated on Friday, from N1,160 to N1,155.
This represents 0.43 percent – five naira gain than N1,160 exchanged on Thursday at the parallel market.
Also, a Bureau De Change (BDC), operator at Ikeja, Salisu Mohammed, said dollar sells for N1,125 at the black market why manufacturers buy at N1140.
He, however, said there is possibility of the naira gaining strength against the naira in coming weeks.
Recall that the naira had steadied in the parallel market on Wednesday and Thursday as it sells for N1,160 respectively.
The appreciation may not be unconnected to the governor of the Central Bank of Nigeria (CBN), Olayemi Cardozo’s unveiling of the bank’s monetary policy thrust and economic outlook for 2024.
Although the rate is still unpalatable to the business community and Nigerians at large but a management consultant, Babatunde Adeniji, said the naira crisis is being largely driven by speculation following the country’s liquidity challenge.
“In terms of price, for the short time it is speculation that drives things. If you are a trader and you want to take a bet, with the level of distrust of the government, with no clear visible assurance of where the dollar is coming from to stabilise the naira, which position would you take? You are bound to take the position skewed towards the dollar,” he stated.
He said the country would begin to heave a sigh of relief when the authorities can pay up all the backlog of foreign exchange forwards with sufficient liquidity to meet pending obligations.
“Nigeria as a country does not have enough dollars to meet its promise. If we don’t do things that are substantial and visible, all that grammar would not help.”
