The Naira was steady against the Dollar on Tuesday, October 1, as it traded at N1,656 per Dollar at the unofficial foreign exchange (FX) market as the country marked its 64th Independence Day celebration.
It also gained against the British Pound Sterling, Euros, and Canadian Dollar.
The Naira rose by N8 on the English currency to sell at N2,161 per Pound from N2,169 and also rose N8 on the European currency to go from N1,855 in the recent day to N1,847 while it appreciated N13 on the Canadian Dollar to close at N1,215 from N1,228 on Tuesday.
The local currency which has faced volatility in recent months got relative ease after the Central Bank of Nigeria (CBN) sold a fresh batch of FX to authorised Bureau De Change (BDC) traders last week.
Throughout September, the CBN sold $20,000 twice to BDC operators to help meet the rising demand for foreign currency. On September 6, 2024, the CBN sold dollars to the BDCs at a rate of N1,580 per Dollar, and on September 25, 2024, at a rate of N1,590.
This intervention was aimed at reducing the pressure in the FX market and ensuring adequate liquidity for smaller traders. So the move saw demand spread away from the official channels and in turn, eased the value of the local currency.
At the Nigerian Autonomous Foreign Exchange Market (NAFEM), the domestic currency closed the month of September at N1,541.94 to the Dollar. It didn’t trade on Tuesday due to the holiday.
Upon resumption on Wednesday, the Naira could depreciate as pressure from Q4 seasonal demands could pile on it.
However, this could be prevented by external reserve buffers which have seen sharp increases in the last nine months.
According to the Central Bank of Nigeria (CBN), the country’s external reserves surged by 15.26% as of September 27, 2024, amounting to a $5.04 billion rise.
This development has pushed Nigeria’s total foreign currency reserves to $38.06 billion, up from $33.02 billion recorded at the beginning of the year.