July 16, 2024

Headline: Naira increases to N1,609/$ at Official Market




The value of the Nigerian naira increases compared to the US dollar on Wednesday, hitting N1,609 at the official market, up 0.37% from N1,615.94 the day before. This encouraging change is the result of the Central Bank of Nigeria’s most recent foreign exchange directives.


On the other hand, the Monetary Policy Committee changed many important monetary parameters and increased the benchmark interest rate by 400 basis points to 22.75% on Tuesday. Though the naira fell by 2.04% vs the dollar in other markets, the expected effect of this rate hike has not yet materialised in the official foreign currency market.


According to government officials, the value of the naira is currently depreciated. According to information from the FMDQ securities market, the naira fell to N1,615.94/dollar on Tuesday from N1,582.94 on Monday.


At the parallel market, dollar sales lack a standard price, changing multiple times throughout the day according to BDC operators. Challenges in finding buyers further complicate the situation. The naira traded between N1,300, N1,450, and N1,500 on Wednesday at the black market, showcasing volatility.


BDC operators, however, faced delays in receiving their dollar allocations promised by the CBN, despite over 1300 BDCs being listed for allocation. The CBN, in a circular on Tuesday, pledged to sell $20,000 to each BDC at a rate of N1,301/$, allowing them to sell to end-users with a margin not exceeding one percent above the purchase rate from CBN. Security raids and reduced trading willingness were cited as factors affecting the foreign exchange landscape.

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