The Nigerian Naira has gained significantly against the US Dollar at the official foreign exchange market, appreciating by N126.64 within 48 hours. According to data from FMDQ, the Naira strengthened from N1,667.42 per dollar on Wednesday to N1,540.78 per dollar by Friday, marking a notable recovery in a short span.
Significant
Appreciation in Naira's Value
Between
Thursday and Friday, the Naira recorded an impressive gain of N126.64 against
the US Dollar, as per the official foreign exchange market rates. Compared to
the exchange rate of N1,667.42 per dollar on Wednesday, this improvement
represents a substantial appreciation.
On
a week-on-week basis, the Naira's performance also showed signs of positive
momentum. Last week, the currency was trading at N1,541.52 per dollar, showing
a slight appreciation compared to this week's official market rates.
CBN's
Intervention Boosts Naira
The
recent appreciation in the value of the Naira can be attributed to the
intervention by the Central Bank of Nigeria (CBN). During the week under review,
the CBN sold foreign currency to eligible Bureau De Change (BDC) operators at a
rate of N1,590 per dollar on Wednesday. This intervention played a crucial role
in strengthening the Naira at the official FX market.
Naira's
Performance in the Black Market
Despite
the CBN's intervention and the gains at the official market, the Naira
experienced depreciation in the parallel (black) market. On Friday, the Naira
was exchanged at N1,700 per dollar in the black market, compared to N1,663 per
dollar the previous week, indicating a decline in value in that segment.
Summary
of Naira's Recent Performance:
- Naira
Gains at Official Market: The Naira
appreciated by N126.64 against the US Dollar in 48 hours, moving from
N1,667.42 per dollar on Wednesday to N1,540.78 per dollar by Friday.
- Week-on-Week
Comparison: Compared to the previous week's
exchange rate of N1,541.52 per dollar, the Naira showed slight improvement
in the official market.
- CBN's
Intervention: The Central Bank of Nigeria
intervened by selling foreign currency to Bureau De Change operators at
N1,590 per dollar, contributing to the Naira's appreciation.
- Black
Market Trends: Despite the appreciation in the
official market, the Naira depreciated in the black market, trading at
N1,700 per dollar on Friday compared to N1,663 per dollar the previous
week.
Conclusion
The recent appreciation of the Naira in the official foreign exchange market reflects a positive response to the CBN's intervention efforts. However, the contrasting depreciation in the parallel market highlights ongoing challenges in stabilizing the currency across all segments of the forex market. Continuous interventions and effective monetary policies will be crucial in maintaining and improving the Naira's value against the US Dollar.
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