The Nigerian naira rose to a four-month high of N1,120 per dollar on the black market amid high activity in Nigeria’s money market, driven by a series of foreign exchange (FX) reforms of the Central Bank of Nigeria (CBN) that has unlocked dollar liquidity.
According to Mistila Dayyabu, a Bureau De Change operator, who shared insights with our source on Friday, the Naira now trades at N1,120 per US Dollar in the parallel foreign exchange market, a significant improvement from the N1,200 recorded on Monday.
“We are currently selling at N1,120 per Dollar and buying at N1,115, compared to the pre-holiday rate of N1,200,” Dayyabu stated.
This development occurs merely four days after the Central Bank of Nigeria (CBN) adjusted its FX selling rate to BDCs to N1,101 per dollar, down from the previous N1,251.
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The Naira’s consistent gains against the Dollar have been sustained for over a month, a result of the CBN’s efforts to stabilize the currency in the foreign exchange market.
The turning point for the naira was the CBN’s clearance of the FX backlog of requests estimated to be worth $7 billion
That naira’s present level was already the highest the currency has traded since mid-last year at the unofficial market on the eve of a second round of devaluation that cut more than half from the naira’s value against the dollar since President Bola Tinubu eased foreign exchange controls in June.
According to Goldman Sachs, rate increases in Nigeria and improved capital inflows indicate a “turning point” for the naira.