NO More 1, 500 Per Dollar, Netizens Reacts As Exchange Rate Drops Drastically, See The New Price That Shocked Everybody
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Beginning the month on a strong note, the value of the Nigerian naira increased significantly from N1, 309. 39 to N1, 278. 58 versus the US dollar. This increase in trade activity, totaling N30, 81, indicates a significant value increase.
For the first time since January 26 of this year, the indicative exchange rate for the Nigerian Autonomous Foreign Exchange Market closed below N1, 300, according to data from FMDQ Securities. Just a few weeks prior, on March 13, 2024, the value of the naira fell to as low as N1, 615 per dollar, demonstrating the recent volatility of the currency.
The naira’s recent gains versus the dollar have been largely driven by the Central Bank of Nigeria’ s deployment of various FX policies, which have. resulted in a respectable appreciation of over 21% since March.
In order to increase the liquidity and stability of the foreign exchange market, these policies include a variety of actions, including the unification of exchange rate windows, the liberalization of the foreign exchange market, the resolution of banks’ and airlines FX backlog obligations, the implementation of a Price Verification System, restrictions on banks’ Net Open Position, the removal of the daily cap on remunerable Standing Deposit Facility,
and the redesign of the Bureau De
Change division.
Forex turnover is a crucial indicator of market liquidity and liveliness. It is the total value of all foreign currency transactions within a given time. frame. Increased buying and selling activity, which is a sign of a healthy market and investor confidence, is associated with higher turnover rates.
The Central Bank of Nigeria and other
financial institutions have added $2.5 billion to the dollar supply in the foreign exchange market over the last two weeks. At the same time, foreign exchange transactions on the Nigerian Autonomous Foreign Exchange Market experienced a sharp decrease, falling by 106% to $111. 18 million on Tuesday. This was in sharp contrast to the $857 million reported the week before. Bureau De Change operators made
purchases at N1, 220 per dollar and sold to consumers at N1, 265/$, resulting in a profit margin of N30. In the parallel market, the naira strengthened to N1, 220 versus the dollar. In relation to the closing rate of N1, 280 the previous week, this Indicates an appreciation of 1.99%.
The Central Bank of Nigeria’s efforts
to pay up all confirmed foreign exchange backlogs, including a $1.5billion last payment, are the reason for the recent strengthening of the naira in both official and black markets.
Becse of the Central Bank’ sed policy initiatives, analysts the naira to continue it’s upward trend against the dollar in April.
The central bank’ s intervention in directly selling foreign exchange to operators, thereby stabilizing trading activity, and the decline in demand for the dollar are credited by traders for the naira’s rise. The naira is still rising, and many involved are optimistic that it will continue to rise because of changes in monetary policy, more investment in government bonds, and increased dollar liquidity in the retail
FX market.
