The Nigerian naira saw a notable uptick in value, reaching N1,595.11 against the dollar in the official Nigerian Foreign Exchange Market (NAFEM). This improvement contrasts with the parallel market, where the naira closed at N1,490 per dollar.
Data from FMDQ revealed a significant appreciation of the naira, with the indicative exchange rate for NAFEM dropping from N1,609.51 to N1,595.11 per dollar, marking a N14.4 gain. Similarly, in the parallel market, the naira strengthened from N1,610 to N1,490 per dollar.
This shift narrowed the gap between official and parallel market rates to N135.11 per dollar, a significant reduction from 49 kobo per dollar previously.
Recent interventions by the Central Bank of Nigeria (CBN), including revised foreign exchange guidelines and a 400 basis point increase in the Monetary Policy Rate, have contributed to this positive trend. Additionally, adjustments to the Cash Reserve Ratio and modifications to the asymmetric corridor surrounding the MPR have been implemented.
Government officials, including CBN Governor Olayemi Cardoso, have underscored that the naira’s undervaluation is primarily due to distortions in the foreign exchange market. Cardoso emphasized the CBN’s commitment to addressing these distortions and holding perpetrators accountable to stabilize the FX market.
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