The foreign exchange (FX) resumed on Tuesday after the Easter holiday with the Naira appreciating to 1,238.3 as Bureau De Change (BDC) operators bought at N1,220 per dollar, cash and transfer to customers at N1,265/$.
The Naira appreciated further to 1,225 per dollar on the parallel market, also known as black market.
This represents 1.99 percent appreciation over N1,280 closed last week.
The Naira strengthened in both the official and parallel market segments following the Central Bank of Nigeria (CBN)’s move to clear all verified FX backlogs (final tranche of $1.5bn).
The Naira which appreciated by 21.8 percent month-on-month in March 2024 is expected to maintain the trend in April, following the policy measures of the Central Bank.
A report by Afrinvest Securities Limited noted that Naira strengthened 21.8 percent m/m against the base currency
(USD) to exchange at N1,309.39/$1.00 at the Nigerian Autonomous Foreign Exchange Market (NAFEM) window in the just concluded month.
In the parallel market segment, the Naira gained 19.6 percent m/m against the USD to close at N1,300.00/$1.00. Similarly, daily average turnover in the NAFEM segment improved by 8.7 percent m/m to settle at $857.8m (as at 28/03/2024).
Our outlook for April suggests that the naira would trade within similar band as the CBN continues its activities to mop up liquidity and attract more capital.
inflow via increased Open Market Operations (OMO) sales following its decision to raise the Monetary Policy Rate (MPR) by 200 bps to 24.75 percent,” analysts at Afrinvest said.
Aminu Gwadabe, president, Association of Bureaux de Change Operators of Nigeria (ABCON) said aside monetary policy tightening that led to interest rate hike and more investment in government instruments and clearance of $7 billion forex backlog forward commitments, the recall of the BDCs has significantly boost dollar liquidity at the retail end of the forex market.
