Home Market Naira Regains Some Value Lost To Dollar, Forex Traders Raise Transaction Volume

Naira Regains Some Value Lost To Dollar, Forex Traders Raise Transaction Volume

by Harry Choms

The Naira regained some of its value against the United States Dollar (USD) on Friday, March 24, 2023, after appreciating by -0.10 percent in the official market.

This means that the cost of purchasing one dollar fell by N0.5 kobo at the end of trading hours in the official market, according to FMDQ Exchange.

According to FMDQ Exchange data, the foreign exchange rate closed at N461.50 kobo/$1 on Wednesday, which is lower than the N462/$1 both currencies exchanged for on Tuesday.

Before the exchange rate ended yesterday’s trading at N461.50 kobo, it had traded at a high of N544.50 kobo and a low of N460.

Furthermore, on Wednesday, investors and exporters increased the value of foreign exchange (Forex) transactions traded in the official market by 588.9%.

On Tuesday, March 21, 2023, investors and exporters traded $62.6 million in the official market supported by the Central Bank of Nigeria (CBN).

However, the following day, investors and exporters exchanged $431.77 million in forex transactions, which is $369.10 million more than the value of foreign exchange transacted on Tuesday.

Meanwhile, the black market for Dollars is expected to ease beginning next week, as the central bank has agreed to release more Naira to commercial banks.

Remember that the scarcity of the Naira and the phase-out of old currencies are expected to encourage people to stockpile dollars.

According to a top bank executive who spoke on the condition of anonymity to Punch, banks have been instructed to visit CBN branches to obtain old cash in order to end the scarcity.

The CBN governor met with bank CEOs this evening virtually. It was a short meeting that lasted for just about 15 minutes. The governor said all old N1,000, N500 and N200 notes will be released to commercial banks beginning from Thursday. The CBN will start with crisp old notes after which the ones deposited by DMBs will be returned. The plan is to flood the economy with cash and ameliorate the challenges Nigerians have been passing through, the bank CEO said. 

Also, the CBN will be cancelling cash withdrawal limits it put in place recently. This means that individuals can now withdraw up to N500,000 across the counter while corporate bodies can do N5m. The CBN is expected to release a circular to this effect later tonight or tomorrow morning (today). But effectively, things should be back to normal as far the cashless policy is concerned, the source added.

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