In a surprising turn of events, the Nigerian Naira gained some ground against the US Dollar this week, with rates at the parallel market reaching a temporary low of N1300 to the dollar. This comes amidst ongoing efforts by the Central Bank of Nigeria (CBN) to improve foreign exchange liquidity in the official market.
“We witnessed a slight uptick in the value of the Naira this week,” confirmed Alhaji Ahmed Buhari, President of the Lagos Bureau De Change Operators Association. “There was some selling pressure on the dollar, which drove the exchange rate down to around N1300 at its lowest point.”
However, Buhari cautioned that this might be a short-term trend. “The market is still volatile, and the rate could fluctuate again depending on factors like dollar demand and CBN interventions.”
Experts Divided on Reasons Behind Naira’s Gains
Financial analysts are divided on the reasons behind the Naira’s appreciation. Some attribute it to increased dollar inflows from abroad, while others suggest it could be a temporary correction after a period of depreciation.
“There could be a few factors at play,” explained Dr. Aisha Mohammed, a Senior Lecturer in Economics at the University of Lagos. “Dollar inflows from Nigerians living overseas sending remittances home could be one reason. Additionally, with the recent oil price increase, there might be some optimism about Nigeria’s export earnings, leading to a slight improvement in dollar supply.”
Official Market Rate Remains Stable
It’s important to note that the official Investors and Exporters (I&E) window, used primarily for business transactions, has a rate set by the CBN. This rate has been around NGN1448 to the dollar in recent weeks. The parallel market, on the other hand, caters to individual transactions and often trades at a significant premium to the official rate due to factors like limited dollar availability and speculation.
CBN Continues Efforts to Bolster Naira
The CBN has implemented several measures in recent months to improve foreign exchange liquidity and stabilize the Naira. These include:
- Restricting access to dollars for certain imports
- Raising interest rates to attract foreign investment
- Intervening in the forex market
The effectiveness of these measures in achieving long-term stability for the Naira remains to be seen.
This is a developing story. Stay tuned to zebranewsonline for further updates.
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