• Saturday, April 13, 2024
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BusinessDay

Sentiments turn positive for Naira as traders quote below N1,300/$ on NAFEM

Traders are increasing quoting rates less than N1,400/$ on the official foreign exchange market as the Nigerian local currency the Naira continues to strengthen ahead of the March 25 meeting of the monetary policy committee, MPC of the Central Bank.

At the market on Thursday, almost 80 deals were done at rates below N1,350/$ with some traders quoting N1,251/$, the lowest since this year.

Data made available to BusinessDay showed that 347 deals were done on NAFEM on Thursday with volume rising to near $600m.

Of this more than half of the deals or 255 were done at rates below N140/$ with traders saying the Naira has turned the corner.

Last week, Goldman and a number of global banks reported that they saw the Naira strengthening to N1,200/$ by year’s end but traders now say that level could be crossed sooner.

“Whether you look at volume or trade or the rates quoted, evidence now abound that traders see the Naira firming go forward from here,” one trader told BusinessDay Friday.

He added, “two days ago, we saw that the lowest rates were at N1,450/$ and yesterday the lowest rates were at N1,00/$. Similarly, we have seen the number deals quoted at N1,650/$ on Wednesday drop. This is a significant transformation for the Naira.”

The Naira is also strengthening on the parallel market also known as black market where the Naira has been trading for below N1,400/$ since Thursday.

BDC operators say they expect the Naira to firm up even further as some of those holding dollars are now looking to sell to avoid suffering losses on the back of sustained Central Bank reforms aimed at stemming the rate volatility that has nearly brough the economy to its knees.