USD Supply Surges to $296 Million as Naira Gains Momentum Against Dollar in Forex Market

In Nigeria’s foreign exchange with Naira against dollar, the supply turnover of the US dollar surged to $296.00 million at the close of trading on Friday, as reported by FMDQ data. This surge marks a notable increase from the $217.14 million recorded just a day earlier, reflecting a substantial 26 percent rise in USD supply turnover.

This surge in US dollar supply coincided with a continued appreciation of the Naira against the greenback. At the close of trading on Friday, the Naira stood at N1,548.25 per USD in the official foreign exchange market, while the average rate at the parallel market was reported at N1,550.

The positive momentum in the foreign exchange market follows recent regulatory actions by the Central Bank of Nigeria (CBN), including the revocation of licenses of 4,173 Bureau De Change Operators. These measures are aimed at curbing market distortions and fostering stability in the value of the Naira.

The recent performance of the Naira reflects an encouraging trend, with the local currency trading at N1,500/$ on Wednesday, marking a notable gain of 9.09 percent from earlier in the week. Similarly, the Naira appreciated to N1609.51 against the dollar at the official window on Wednesday, indicating a 1.67 percent increase from the previous trading session.

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), acknowledged the challenges posed by market distortions, which have undervalued the Naira. Cardoso reiterated the CBN’s commitment to addressing these distortions and ensuring a fair and transparent forex market.

“We will take off and throw away any distortions that arise, and those found engaging in unethical practices will face consequences as a deterrent,” Cardoso emphasized.

He also highlighted the efforts of certain actors to confuse the forex market but assured stakeholders of the CBN’s resolve to promote market integrity and discourage unethical behavior.

The recent surge in US dollar supply and the consequent appreciation of the Naira highlight the resilience of Nigeria’s foreign exchange market amid evolving economic dynamics. With regulatory interventions aimed at promoting stability and transparency, stakeholders remain optimistic about sustained progress in the forex market and overall economic stability.