THE PARALLEL MARKET SEES THE NAIRA DEPRECIATING TO 1,440 PER DOLLAR.

The parallel market witnessed a less favorable performance for the naira, trading within the range of 1,440/$ to 1,460/$ at the conclusion of Monday’s trading, as reported by Bureau de Change operators.

Contrastingly, the official forex window exhibited a stronger naira on Monday, recording a 1.09% appreciation to close at 1,419.86/$. This positive shift was attributed to the reassurance from Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), who highlighted ongoing efforts to address currency volatility.

On the official forex market, the dollar was sold at 1,435.53/$ on the preceding Friday, reflecting a positive trend in contrast to last week’s all-time low of 1,482.57/$. Despite challenges faced by the CBN and the Federal Government in boosting liquidity, recent policy announcements contributed to the naira’s rebound.

Governor Cardoso affirmed the CBN’s commitment to resolving bottlenecks affecting FX supply, addressing challenges in remittance flows, limiting banks’ ability to hold positions, and promoting the growth of Nigerian businesses. He emphasized the importance of stabilizing the naira by addressing fundamental economic issues, controlling inflation, and fostering export-led growth.

Cardoso disclosed that $2.3 billion in verified FX requests had been settled, with N2.2 billion outstanding, which he assured would be promptly paid. He highlighted the discovery of issues within the $7 billion backlog, including invalid import documents, non-existent entities, and discrepancies in foreign exchange allocations.

In September 2023, FTSE Russell downgraded Nigeria from a “frontier” to an “unclassified” market due to challenges faced by foreign investors in repatriating funds. The CBN initiated the clearing of FX backlog in banks in November 2023.

News Sources: Techeconomy