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The Nigerian naira continued its upward trajectory against the United States dollar, closing at 1,382/$ in the official market on Thursday, marking a significant N18 gain.
This development follows a stern warning from the Presidency to currency speculators against undermining the national currency, cautioning that such activities would lead to financial losses. The naira’s strengthening is attributed to increased dollar supply in the Nigerian Autonomous Foreign Exchange Market (NAFEM), as evidenced by trading data from the FMDQ Securities Exchange Limited, showing a 1.3 percent appreciation of the naira. The currency had already made substantial gains in both official and parallel markets the previous day, closing at N1,400/$ in the black market. The official market saw the intraday high reaching N1,598 per dollar, an improvement from Wednesday’s close of N1,620, while the intraday low firmed up to N1,300/$, from N1,350/$ the day before. Market dynamics shifted with a notable increase in dollar supply, rising to $288.47 million, a 7.46 percent increase from the previous session’s $268.29 million. The recent positive trend in the forex market comes after the Central Bank of Nigeria (CBN) announced the clearance of all valid foreign exchange backlogs, a move aimed at bolstering market confidence. The CBN’s Governor, Olayemi Cardoso, reaffirmed the commitment to settling inherited forex claims totaling $7 billion, with $1.5 billion already disbursed to fulfill bank customer obligations. The financial measures have seemingly started to reflect positively on Nigeria’s economic indicators, with the country’s foreign currency reserves climbing 3.62 percent to $34.37 billion as of March 12, 2024. Moreover, a dramatic increase in Diaspora remittances, which soared to $1.3 billion in February from $300 million in January, indicates a growing confidence in Nigeria’s economic management. These developments hint at a recovering economy and a stabilizing naira, offering a glimpse of optimism for Nigeria’s financial stability and exchange rate predictability.
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