The Naira continued to appreciate versus the US dollar on Wednesday. In parallel markets as well as the official foreign exchange market, Nigeria’s currency demonstrated appreciation.
The Naira rose by N16, or 1.26 percent, at the Nigerian Autonomous Foreign Exchange Market, according to statistics from the FMDQ Securities Exchange. The dollar was quoted at N1,262.85/$, beating Tuesday’s closing rate of N1,278.58.
The Naira‘s rising trend vs the US dollar, which saw it reach 1,262/$, is indicative of a stable supply of currencies and points to a bright future for strengthening.
The Central Bank of Nigeria implemented a number of foreign exchange policies to increase the supply of dollars and enhance market transparency, which is credited with the Naira’s appreciation.
The CBN notably eliminated market segmentation on June 14, 2023, combining all categories into the Investors & Exporters window (now referred to as the Nigerian Autonomous Foreign Exchange). Among other improvements, the CBN also brought back the Willing Buyer, Willing Seller framework.
The CBN directed International Money Transfer Operators to give beneficiaries a naira payout exchange rate that reflects the current market price in January 2024.
The regulator for the banking and financial sector dropped all limits on the spread for interbank foreign exchange transactions in February 2024 and relaxed regulations for the sale of interbank revenues. Concurrently, the CBN limited the distribution of Business Travel Allowance and Personal Travel Allowance to electronic channels only.
The CBN enacted a number of measures by March 2024 that reduced Naira volatility in an effort to improve transparency and boost foreign exchange market inflows.
