Naira Rises To N1,173.88 At Official Market
The naira has surged to N1,173.88 per dollar on the Nigerian Autonomous Foreign Exchange Market, (NAFEM) on Tuesday, May 28th, marking a remarkable increase of 14.09 percent from the previous day’s rate.
This surge represents the highest one-day increase since January 2024 and coincides with a significant rise in foreign exchange turnover, which saw an 81.59 percent increase to $328.32 million.
Data from the FMDQ indicates that the naira remained stable on Monday, May 27 at the rate of N1,339.33 to a dollar.
However, the foreign exchange turnover on Monday witnessed a significant decrease, amounting to $180.8 million, reflecting a 67.50 percent drop compared to the previous trading session at the end of the preceding week.
On Tuesday, May 28, the foreign exchange market underwent a notable recovery, with turnover soaring to $328.32 million. This substantial surge in both value and turnover signifies renewed activity and demand in the FX market, likely propelled by interventions and policies aimed at stabilizing the naira.
The enhanced exchange rate indicates that the efforts of the Central Bank of Nigeria, CBN, to uphold currency stability are yielding results, even amidst fluctuations in market liquidity.
Analysts have observed that sustaining the naira at this level amid changing turnover levels signifies a managed foreign exchange landscape, essential for bolstering investor confidence and facilitating economic planning.
The rise in foreign exchange turnover could be attributed to a blend of factors such as end-of-month financial settlements, heightened inflows from foreign investments, and strategic initiatives by the central bank to maintain adequate liquidity in the market.
Additionally, the appreciation observed on the official market coincided with auctions of treasury and Open Market Operations, OMO, bills.
Subsequent to the 295th meeting of the Monetary Policy Committee, MPC, of the CBN, which resulted in a noteworthy increase in the Monetary Policy Rate, MPR, by 150 basis points to an unprecedented 26.25 percent, the CBN offered a total of N508.98 billion during the Nigerian Treasury Bill, NTB, auction that was held on May 22, 2024.
