The Nigerian Naira has experienced a notable appreciation, jumping by N125 to reach N1,275 per US dollar in the parallel market over the weekend. This recovery marks a 9.8% increase from its previous rate of N1,400 to a dollar at Friday's close.
This positive shift comes as the Senate, through its Finance Committee, emphasized the urgent need for a collaborative effort to stabilize and sustain the Naira. Amidst calls for stability, currency traders at the Wuse Zone 4 market have voiced concerns over the market's unpredictability and the government's indecision regarding currency valuation adjustments.
Malam Yahu Ibrahim, a trader, highlighted the challenges posed by the Naira's instability, stating, "We take risks against ourselves every day because I don’t know how they are doing it, the Naira is just swinging. If the government wants to bring down the dollar totally, they should do it or if they want the Naira to fall, they should do it and not allow it to fluctuate. It is killing businesses."
Further insights from another trader, Abubakar Taura, suggest a cautious approach among traders due to rumors of potential drastic measures by the Central Bank of Nigeria (CBN) to stabilize the currency.
The recovery also coincides with the Association of Bureaux De Change Operators of Nigeria's efforts to unify the retail end of the foreign currency market. ABCON President, Aminu Gwadabe, mentioned, "Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps."
Despite these developments, the Naira continues to face pressure in the official foreign exchange window, where it closed at N1,339/$ on Friday, down from N1,309/$ the previous day, as per data from the FMDQ securities exchange.
In response to these challenges, Senator Sani Musa, Chairman of the Senate Committee on Finance, reiterated the need for proactive measures to safeguard the Naira's stability. "The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency," he stated.
Senator Musa also highlighted the importance of addressing the root causes of Naira depreciation, which include global oil price fluctuations, fiscal deficits, and structural imbalances in the economy. He assured that the Senate Committee on Finance is committed to engaging with stakeholders to formulate and implement effective policies and strategies to mitigate these issues and foster economic stability.
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