Emmanuel OchayiThe Naira value slightly dropped in the official window despite surge in foreign exchange transactions, soaring to $584 million as data from the Nigerian Autonomous Foreign Exchange Market (FMDQ) revealed.
This surge in FX transactions marks an increase from the previously recorded $440 million daily transactions, signaling a dynamic shift in the foreign exchange landscape.
However, amidst this surge in transactions, the national currency, the Naira, experienced a depreciation against the United States dollar at the official market, closing at N1,433 per dollar, compared to N1,419 per dollar recorded the previous day.
This development comes in the wake of concerted efforts by the Central Bank of Nigeria (CBN) to stabilize the foreign exchange rate and enhance liquidity in the market.
READ ALSO: Naira Weakens At Parallel Market, Appreciates To N1,419/$1 At Official Window
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In circulars and guidelines issued by the apex bank, measures were implemented to address concerns regarding the growing foreign currency exposures of banks, with particular emphasis on adjusting FX exposures to mitigate risks.
The CBN’s directive, titled “Harmonization of Reporting Requirements on Foreign Currency Exposures of Banks,” underscores the imperative of aligning banks’ foreign currency positions with regulatory limits to safeguard against potential risks.
In response to these measures, the national currency experienced a modest rebound at the official market, closing at N1,455.59 per dollar on Wednesday, N1,445 per dollar on Thursday, and N1,435.53 per dollar on Friday of the preceding week.
Despite these efforts, the parallel market witnessed the dollar trading at higher rates, ranging between N1,480 and N1,485 per dollar, as reported by Bureau De Change operators.
Concerns were raised over the exorbitant prices of the dollar, with some operators expressing reluctance to trade due to prevailing market conditions.
Looking ahead, economic managers remain optimistic about the prospects of the Naira, anticipating a firming up of the currency across both official and parallel markets in the coming days. As stakeholders navigate these developments, a concerted effort is underway to achieve stability and resilience in Nigeria’s foreign exchange market.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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