On Wednesday, the naira rebounded from a week of losses due to a 62.81 percent increase in dollar supply at the official foreign exchange (FX) market. After trading, the naira appreciated by 0.76 percent, with the dollar quoted at N1,608.73 compared to N1,621.12 on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to FMDQ Securities Exchange Limited.
Dollar supply by willing buyers and sellers rose to $270.81 million on Wednesday from $166.34 million on Tuesday. During intraday trading, FX market participants quoted the dollar at a high of N1,645 on Wednesday, up from N1,635. The intraday low closed at N1,399.04, down from N1,546 per dollar on Tuesday.
At the parallel market, also known as the black market, the naira traded at N1,610 per dollar on Wednesday compared to N1,600/$ on Tuesday. The naira has faced increased pressure over the past week due to strong dollar demand from individuals traveling for summer holidays and paying school fees, according to traders.
On Tuesday, Nigeria’s currency hit a four-month low of N1,621.12 per dollar due to strong demand in the official FX market. The naira’s previous low was N1,627.40 per dollar on March 8, 2024.
Bureau De Change (BDC) operators have urged the Central Bank of Nigeria (CBN) to increase its interventions to reduce volatility and boost confidence in the FX market. Aminu Gwadabe, president of the Association of Bureau De Change Operators of Nigeria (ABCON), commended the CBN for resuming foreign exchange sales to BDCs, which he said are crucial for mitigating retail market volatility. However, he called for more decisive actions and closer collaboration with BDCs to maintain adequate liquidity and reduce market volatility.
Gwadabe also urged the CBN to increase the volume and frequency of its interventions through BDCs and to reconsider the stringent requirements for BDCs’ license reapplications, extending the deadline if necessary. He emphasized the need for integrity in fiscal policies and stressed the importance of dialogue in addressing Nigeria’s economic challenges, including hunger, inflation, insecurity, and unemployment.
In a message to investors, Gwadabe highlighted the importance of strong fiscal and monetary policies, stating, “Capital only follows infrastructures.”
