The Naira made a noteworthy recovery against the US dollar in the parallel market, appreciating to N1280/$ from a previous rate of N1400/$. This improvement marks an 8.57 percent increase in value, according to recent market data sourced from currency traders by Nairametrics.
The currency's rebound comes after a turbulent period where it had significantly depreciated, dropping to as low as N1400 against the dollar due to increased demand and insufficient supply in the market. Just weeks before, the Naira had strengthened to below N1000 against the dollar, demonstrating extreme volatility in its valuation.
Despite the positive movement in the parallel market, the official foreign exchange window recorded a continued depreciation, with the Naira closing at N1339.23/$1, down from N1309.88/$1 the previous day, as shown by data from FMDQ.
In response to the ongoing currency fluctuation, the Central Bank of Nigeria (CBN) intervened earlier in the week by disbursing $15.83 million to 1,583 Bureau De Change (BDC) operators at a rate of N1021/$1. This move aimed to enhance foreign currency accessibility for qualified end-users and stabilize the forex market.
Moreover, the Association of Bureaux De Change Operators of Nigeria (ABCON) announced plans to establish a unified retail end for the foreign currency market to address the Naira's recent depreciation issues. Aminu Gwadabe, president of ABCON, disclosed initiatives including the inauguration of state chapters for better market coordination and integration, along with upgrading their Business Process Platform to enhance regulatory compliance and market operations.
Senator Ned Nwoko also weighed in on the matter, advising the federal government and the CBN against artificially inflating the Naira's value. He emphasized the importance of policy consistency and the implementation of strategies that naturally stimulate demand for the Naira. Highlighting the significance of conducting transactions in Naira for Nigerian exports like crude oil to boost its demand and consequently its value.
These multifaceted efforts and discussions underscore the complex nature of forex management in Nigeria and the various approaches being considered to stabilize and strengthen the Naira in both domestic and international markets.
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