Emmanuel OchayiThe naira remained stable at N1,483.62 per US dollar on Monday, at the Nigerian Autonomous Foreign Exchange Market, as reported by FMDQ Securities Exchange Limited.
This marks a marginal strengthening of 0.02 per cent from the rate of N1,483.99 quoted on Friday, June 7.
Join our WhatsApp ChannelThroughout the trading day, the naira showed fluctuations, trading as high as N1,507 per dollar and as low as N1,399 per dollar. Despite these variations, the stability of the naira brought a sense of cautious optimism among traders and economists.
John Ade, a forex trader in Lagos, noted; “The slight strengthening we see today is a positive sign. It shows that there is some stability returning to the market, but we must remain vigilant.”
The parallel market, often referred to as the black market, saw the naira steady as well, with traders quoting prices between N1,490 and N1,495 per dollar. This consistency is significant, given the volatility that often characterises this unofficial market.
Last week, the naira experienced a slight improvement in value, increasing by 0.13 per cent from the N1,485.99 quoted on Friday, May 31, 2024. This trend of gradual strengthening has brought cautious optimism among market participants.
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Banking sector experts suggest that the current stability of the naira, is a result of several factors, including interventions by the Central Bank of Nigeria (CBN) and a slight improvement in foreign exchange reserves.
In a recent statement, Dr. Akin Olawale, an economist at the University of Lagos, he explained, “The CBN’s strategic interventions have played a crucial role in stabilising the naira. Additionally, we are seeing a modest uptick in our foreign exchange reserves, which gives the market some breathing room.”
However, challenges remain. The broader economic environment, marked by inflation and external economic pressures, continues to pose risks to the naira’s stability.
Rasaq Muhammed, a Lagos-based economic analyst, warned, “While the naira’s current stability is encouraging, we must not overlook the underlying issues. Inflation is still high, and external economic conditions are unpredictable. These factors could quickly change the current trend.”
Meanwhile, related economic news indicates that the Federal Government has struggled to lift import levies despite rising medical costs, and hospitals are cutting dollar expenses to manage inflation. Additionally, Finance Minister, Wale Edun, emphasised that liquidity, rather than restructuring, is needed to address the power sector’s challenges.
As the naira holds its ground, stakeholders continue to monitor the situation closely. The coming weeks will be critical in determining whether this stability can be maintained or if further fluctuations are on the horizon.
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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