The Naira has risen further to 1,300.43 on the official foreign exchange (FX) as dollar supply surged by 69.43 percent on Wednesday, a day after the Central Bank of Nigeria (CBN) raised further, the key interest rates.

After trading on Wednesday, the Naira gained 6.35 percent as the dollar was quoted at N1,300.43, stronger than N1,482.95 quoted on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data from the FMDQ Securities Exchange.

Dollar supply by the willing sellers and willing buyers rose by 69.43 percent from $245.58 million on Tuesday to $416.10 million on Wednesday, the highest since almost two months.

The summary of the FX trading revealed that the intraday high closed at N1,460 per dollar on Wednesday, stronger than N1,486/$ closed on Tuesday. The intraday low appreciated to N1,200 on Wednesday as against N1,300 closed on Tuesday.

At the parallel market, popularly called black market, Naira closed at between N1,310 and N1,350 in Lagos. In Abuja, some traders bought at N1,300 and sold at N1,320.

Related News

With the current rate at the official and black market, the exchange rate gap has closed at N9.57 on Wednesday.

“The CBN Governor sounded much more confident of NGN stability, even appreciation, going forward, now that the validated FX forward settlement backlog has been dealt with,” Razia Khan, managing director, Chief Economist, Africa and Middle East Global Research, Standard Chartered, said.

According to her, the CBN will rely on the FX appreciation channel to contain inflation, pledging that interest rates at these levels will not be ‘long drawn’. “While the next MPC meeting is scheduled for May 21, 2024 the CBN expects that inflation will soon peak, before decelerating again,” she said.

Nigeria’s Central Bank on Tuesday raised the key interest rate by 200 basis points to 24.75 percent from 22.75 percent in February 2024, to rein in inflation and stabilise FX.

In one month, the CBN has jerked its benchmark interest rate, also known as the Monetary Policy Rate (MPR) by 600 basis points to 24.75 percent in March 2024. Last month, the apex bank increased the interest rate by 400 basis points to 22.75 percent.

More from our Markets Column
Read Next
lagbaja

21 Orphans, 10 Widows: Army Chief laments devastating impact of Delta killings

By BusinessDay • March 28, 2024

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp