Steady Dollar Supply Pushes Naira To N1,262/$, Delighting Nigerians

The Nigerian Naira continues its upward trend against the United States dollar at N1,262/$1, bringing smiles to many faces across the nation.

On Wednesday, the currency appreciated both at the official foreign exchange and parallel markets, marking a significant gain.

According to data from the FMDQ Securities Exchange, the Naira gained N16 or 1.26 percent at the Nigerian Autonomous Foreign Exchange Market. The dollar was quoted at N1,262.85/$ on Wednesday, strengthening from N1,278.58 closed on Tuesday.

This positive movement in the exchange rate reflects the effectiveness of several foreign exchange policies implemented by the Central Bank of Nigeria (CBN). These policies aim to boost dollar supply and enhance transparency in the FX market.

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Currency traders attribute the Naira’s appreciation to decreased demand for the greenback and the CBN’s decision to sell foreign exchange directly to operators. Ibrahim Yahu, a BDC operator at Wuse Zone 4, commented on the situation, saying, “The demand for dollars has gone down and the Naira is appreciating because of the new rate determined by the CBN for traders.”

The recent reforms by the CBN, including the abolition of market segmentation and the introduction of the Willing Buyer, Willing Seller framework, have contributed to reducing the volatility of the Naira. Additionally, directives such as limiting the payout of Personal and Business Travel Allowance to electronic channels only have played a role in stabilizing the currency.

At the parallel market, the Naira strengthened to N1,250 to a dollar, marking a gain of 0.8 percent over the previous day’s rate. This trend has been consistent, with the Naira gaining 46 percent of its value against the dollar since February 20, 2024.

Overall, the Naira’s steady rise against the dollar is a positive development for Nigerians, reflecting the effectiveness of recent CBN policies and the resilience of the country’s economy. With expectations of further appreciation, stakeholders remain optimistic about the Naira’s future trajectory in the foreign exchange market.