Naira rises to 1,564.48/$ in official market on increased dollar supply

The naira on Thursday recorded a gain of 1.38 percent on the official foreign exchange (FX) market following increased dollar supply by market players.

After trading on Thursday, the dollar was quoted at N1,564.48 compared to N1,586.04 quoted on Wednesday at Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange Limited showed.

Read also: Naira records first loss as external reserves decline by 0.68%

The dollar supplied by willing buyers and willing sellers increased by 61.54 percent to $149.25 million on Thursday from $92.39 million recorded on Wednesday at NAFEM.

The intraday trading show market players quoting dollar as high as N1,600 on Monday as against N1,595, while the intraday low closed at N1,515 on Thursday from N1,495.

At the parallel market, also known as the black market, the naira gained N5 as the dollar closed at N1,595 compared to N1,600 closed on Wednesday.

The Central Bank of Nigeria (CBN) could not hold the retail Dutch auction system on Wednesday as there was no auction statement released. In line with its pledge to provide transparent access to foreign exchange for all legitimate customers, the CBN’s leadership has introduced an additional mechanism through the Retail Dutch Auction System (RDAS) to directly facilitate FX sales to end users.

This approach aims to foster a more transparent market, reducing information asymmetry and supporting price discovery. It complements the two-way quote system deployed over the past few months to enhance liquidity in the interbank market, through which over $305 million of foreign exchange has been sold to authorised dealers in the last three weeks.

Read also: MTN, Airtel chart naira profit path after $1.56bn losses

“The central bank has made substantial efforts to stabilise the foreign exchange market, which has led to increased foreign portfolio investment inflow and a reduction in exchange rate volatility. In addition to current measures being taken by the Bank, medium and long-term strategies are being explored to ensure that the exchange rate settles at a market determined equilibrium level,” Bala Moh’d Bello, member of the Monetary Policy Committee (MPC), in his personal statement at the last meeting in July 2024.