Naira Strengthens Against US Dollar Amid Central Bank Intervention

The Nigerian naira gained against the United States Dollar at the parallel market, popularly known as the black market on Wednesday following the Central Bank of Nigeria (CBN’s decision to intervene in the market.

The local currency appreciated from about N950 it traded against the United States Dollar at the black market to N850 after NNPC announced it has signed a $3 billion agreement with Afrexim Bank to cushion the deficit in the forex market.

Bureau de Change operators, prominent players in the currency exchange ecosystem, shared their insights on this development. Alhaji Taofeek Ahmed disclosed, “Today, we observed naira trading between 830/$ and 850/$. The demand was notably lower compared to the previous week.”

Another operator, Alhaji Mustapha Umar, conducting business at the Lagos airport, confirmed that the US dollar was both bought and sold for 850/dollar and 835/dollar, respectively.

Aminu Zakari, a BDC operator operating in the vicinity of the Abuja CBD, noted that the parallel market had been experiencing a degree of uncertainty subsequent to the CBN’s announcement. Market participants eagerly anticipate the forthcoming intervention by the central bank, which aims to bring stability to this segment of the market.

Turning attention to the Investor & Exporter forex window, trading commenced at N781.66/$ and reached a peak of N799.90/$ before ultimately closing at N759.86/$ on Wednesday. This contrasts with Tuesday’s closing rate of N781.30/$.

Addressing the situation earlier this week, Folashodun Shonubi, the Acting Governor of the CBN, outlined the bank’s proactive measures to halt the naira’s slide during a briefing with President Bola Tinubu at the State House in Abuja.

Shonubi emphasized the CBN’s commitment to enhancing liquidity and achieving market stability, including addressing challenges within the parallel market.

He further clarified that fluctuations within this market segment are driven not only by economic factors but also by speculative demand.