Official exchange rate snaps losing streak, gains for first time in 7 days

The exchange rate between the naira and dollar snapped 7 consecutive days of losses to record its first gain on Wednesday, May 15 2024.

Data from the FMDQ indicates the exchange rate closed at N1459.02 to gain 4.21% the first gain after back to back losses that saw the official exchange rate fall below the N1,500/$1 mark. The Naira appreciated in contrast with the N1520.4/$1 recorded the previous day.

This represents a significant recovery after a 2.78% depreciation on May 14, 2024.  The appreciation comes after a decline over the last week, with the Naira losing approximately 11% of its value in the official market.

The increase in forex turnover to $289.14 million, a 124.56% rise from $128.76 million the previous day, likely contributed to this appreciation.

The increase in liquidity on the market also comes after the daily turnover in the forex market witnessed a sharp drop of about 41% the previous day.

READ ALSO: No respite for naira, depreciates further to N1520/$1 at official window

However, the intra-day high hit a high of N1,593 approaching the N1,600 mark while the intra-day low traded at N1,401/$1. The wide disparity is indicative of a highly volatile official market.

In the parallel market, the Naira traded between N1,520/$1 and N1,525/$1 on Wednesday based on the quotes we received.

The CBN activated plans to double foreign-currency remittance flows through formal channels by granting 14 new (IMTOs) Approval-in-Principle (AIP), according to the Bank’s Acting Director of Corporate Communications, Mrs. Hakama Sidi Ali on Wednesday.

Sidi Ali noted that increasing formal remittance flows will help the historical volatility in Nigeria’s exchange rate caused by external factors, such as fluctuations in foreign investment and oil export proceeds.

Already, Nigeria recorded $282.61 million as total direct foreign exchange (FX) remittances in the first quarter (Q1) of 2024. The figure represents a decrease of $18.96 million or 6.28% compared to the $301.57 million diaspora remittances recorded in Q1 2023.

The CBN earlier reached an agreement with International Money Transfer Operators (IMTOs)to set up a Collaborative Task Force to double remittance inflows into the country.  The task force formed to double remittance inflows into Nigeria reports directly to Yemi Cardoso, the Governor of the CBN.