Naira strengthens to 1,531/$ as trading week ends

The naira closed the trading week on Friday at N1,531 per dollar in the official foreign exchange (FX) market, showing an improvement compared to the previous week.

This marked an appreciation of 1.1 percent week-on-week, as the dollar was quoted at N1,531, which was N17 stronger than the N1,548 rate observed the previous Friday at the Nigerian Foreign Exchange Market (NFEM), according to data from the Central Bank of Nigeria (CBN).

In terms of daily trading, the naira strengthened by N17.50, closing at N1,531 on Friday, up from N1,548.50 on Thursday. The highest rate quoted by authorised dealers on Friday was N1,550, slightly better than the N1,552 rate from the previous week. The lowest rate recorded in the official FX market was N1,515, reflecting a gain of N25.20/$1 compared to the N1,540.20 from the previous Friday.

In the parallel or black market, the naira appreciated by N20, with the dollar trading at N1,660 on Friday, up from N1,680 the previous week.

Looking ahead, the CBN is set to officially launch the Nigerian Foreign Exchange (FX) Code on Tuesday. The FX Code is designed to provide ethical guidelines for authorised dealers in the Nigerian FX market, promoting responsible market conduct.

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The CBN has scheduled the official launch for Tuesday, January 28, 2025, at its head office auditorium in Abuja. This launch follows the CBN’s ongoing efforts to strengthen governance and transparency in the FX market, including the introduction of updated guidelines in November 2024.

A major aspect of the revised guidelines requires the boards of banks, along with their Chief Executive Officers (CEOs) and Chief Compliance Officers, to annually attest to their adherence to the Nigeria FX Code of ethics and conduct. This attestation serves as a commitment to maintaining market integrity and complying with all CBN regulations.

These revised guidelines aim to further develop Nigeria’s FX market, particularly after the consolidation of all official FX market windows. The circular issued by Omolara Omotunde Duke, director of the CBN’s financial markets department, replaces earlier directives, including the operational changes from June 14, 2023, and other previous circulars dating back to 2017.

Under the new framework, authorised dealers are required to facilitate FX transactions for both businesses and individuals while ensuring full compliance with regulations. Dealers must conduct proper due diligence, offer transparent pricing, and provide access to the market via digital solutions. Additionally, all legitimate FX transactions must occur exclusively through authorised dealers, with transactions through unlicensed intermediaries strictly prohibited.

The new guidelines also apply to Bureaux De Change (BDC) operators. Licensed BDCs can purchase FX from authorised dealers to meet customer demands, within the limits set by the CBN. Similarly, all FX transactions conducted by BDCs, International Money Transfer Operators (IMTOs), and authorised dealers must comply with their licenses and the Nigeria FX Code.