Naira Rebounds At Official Forex Window To N1,419/$, Despite Lingering Parallel Market Concerns

In a surprising turn, the naira displayed resilience at the official forex window, appreciating by 1.09% to close at 1,419.86/$.

Central Bank Governor Olayemi Cardoso’s reassurances on tackling currency volatility played a pivotal role, marking a notable rebound from the recent all-time low of 1482.57/$.

This positive shift follows a series of policy announcements aimed at stabilizing the foreign exchange market.

However, the parallel market tells a different story, with the naira trading between 1,440/$ and 1,460. Bureau de Change operators attribute this to the activities of hoarders, as highlighted by Mr. Abubakar Abdusallam, a BDC operator in Abuja, who noted, “Today, we sell dollars at 1455/$ but we are buying at 1,445/$.” The parallel market had closed trading on Friday at 1,450/$.

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Despite the positive momentum, concerns linger, with varying rates reported by BDC operators. Surajo Sani mentioned, “Today, we traded dollars at the rate of N1,440 and that is the best I can do,” while Ibrahim cited selling the dollar at 1,460. These disparities reflect the challenges faced in the currency market.

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Central Bank Governor Cardoso emphasized the ongoing efforts to address fundamental economic issues, promote business growth, and enhance the attractiveness of naira assets to foreign investors. He highlighted successful settlements of verified FX requests totaling $2.3bn, with an outstanding obligation of N2.2bn to be cleared shortly.

Cardoso acknowledged the contentious nature of the $7bn FX backlog, stating, “We discovered that of the roughly $7bn, about $2.4bn had issues,” ranging from invalid import documents to entities that didn’t exist.

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