Naira Gains Against Dollar as Forex Supply Increases

The Nigerian currency, Naira, strengthened against the US dollar on Tuesday, as the foreign exchange market witnessed a surge in the supply of foreign currencies. According to data from FMDQ, the Naira appreciated by 2.36% or N35.32 to close at N1,499.07 per US dollar on Tuesday, compared to N1,534.39 on Monday.

This was the highest level of the Naira since January 29, when the Central Bank of Nigeria (CBN) introduced new reforms to improve the transparency and efficiency of the forex market. The reforms included a revision to the FMDQ FX Market Rate Pricing Methodology and a market notice on the Financial Markets Price Transparency.

However, the Naira weakened at the Parallel Market, where it traded at N1,517 per US dollar on Tuesday, down from N1,495 on Monday.

The Parallel Market is an unofficial segment of the forex market where currencies are traded at rates determined by demand and supply.

The CBN does not intervene or regulate the Parallel Market, unlike the official market where it sells forex to authorized dealers and sets the exchange rate.

The CBN governor, Olayemi Cardoso, has assured that the apex bank will continue to ensure exchange rate stability and support the economic recovery.

He made this statement on Friday, when he met with the Senate Joint Committee on Banking, Insurance and Financial Institutions in Abuja. He also highlighted the various interventions and policies of the CBN to boost the productive sectors of the economy and enhance financial inclusion.