Naira strengthens against dollar, gains against major currencies

The naira continued its recovery against the US dollar on Tuesday, gaining N6 to trade at N1,601/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), compared to N1,607/$1 on Monday.

The day’s intra-day trading saw a high of N1,623/$1 and a low of N1,560/$1, with a narrow spread of N63/$1.

In the parallel market, the naira weakened slightly, losing N2 against the dollar to trade at N1,607/$1, down from N1,605/$1.

Against the British pound, the naira strengthened, gaining N10 to trade at N2,090/£1 from the previous N2,100/£1.

The naira also gained N10 against the euro, trading at ₦1,740/€1, compared to ₦1,750/€1 previously. The exchange rate against the Canadian dollar remained stable at N1,200/CA$1.

It appears that the Central Bank of Nigeria (CBN) is yet to sell any foreign exchange (FX) on the official market this week.

Also, the ongoing 10-day hunger protest may have led to slow business and trading activities, which resulted in lower FX turnover.

READ ALSO: Nigeria’s FX market records lowest turnover since January amid economic strain

Two weeks ago, the CBN sold a cumulative amount of $148 million to authorized dealers.

The foreign exchange was sold to 29 Authorized Dealer banks at exchange rates ranging between N1,470.00$1 and N1,510.00/$1. It was the third to authorise FX dealers in July as the CBN tried to boost liquidity in the FX market.

The apex bank earlier announced the sale of $106.5 million as foreign exchange (FX) to 29 FAX dealer banks.

In a statement signed by Dr Omolara Omotunde Duke, Director, Financial Markets Department, it was disclosed that on July 18 and 19, 2024, the CBN sold $106.5 million to 29 authorized dealer banks at exchange rates ranging from N1,498/$1 to N1,530.00/$1 and bought $9.5 million from four authorized dealer banks at rates between N1,510/$1 and N1,550/$1.

The central bank also stated that it had sold $122.67 million to 46 authorized dealers two weeks ago.

Nigeria’s central bank sold at least $377.17 million to authorized FOREX dealers in July.

The CBN plans to undertake a Retail Dutch Auction System (DAS) to mitigate the demand for eligible transactions through authorized dealers on Wednesday, 07 August 2024.