Naira closes flat as dollar supply surges two-months high of $556.25m

The naira on Friday closed flat against the US dollar, ending the week marginally strong at the official foreign exchange (FX) market, as dollar supply surge by a two-months high of $556.25 million.

Dollar supplied by willing sellers and willing buyers including commercial banks rose significantly by 231.99 percent to $556.25 million on Friday from $167.55 million recorded on Thursday.
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The last time the FX market recorded an increase in dollar supply was on March 28, 2024 when it jumped to $857.78 million.

After trading on Friday, the naira gained slightly by 0.19 percent as the dollar was quoted at the rate of N1,482.81 compared to N1,485.66 quoted on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to the data from the FMDQ Securities Exchange Limited.

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The FX market summary released by the FMDQ showed that the intraday high closed at N1,519 per dollar, weaker than N1,510 quoted on Thursday. The intraday low closed flat at N1,400 on Friday as against N1,401 quoted on Thursday.

The local currency appreciated by 0.67 percent against the dollar on the parallel market, also known as the black market. The naira was quoted at N1,500 on Friday as against N1,510/$1 quoted on Thursday.

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), during the Monetary Policy Committee (MPC) breifing in Abuja, said the Committee members observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system.

The Committee also noted the marginal increase in the external reserve balance between March and April 2024 and urged the Bank to sustain its focus on accretion to reserves.

The MPC commended the Central Bank for the recent approval of licenses of 14 international Money Transfer operators (IMTOs). This is expected to improve competition and lower the cost of transactions, thus attracting more remittances through formal channels.