After hitting a record low on January 10, 2024, the Naira demonstrated a remarkable recovery against the dollar at the official market on January 11, 2024.
The domestic currency appreciated by a substantial 19.17%, closing at N874.79 to a dollar at the end of the business day, as per data from NAFEM, the official forex trading platform.
This represents a significant gain of N207.53 or a 19.17% increase compared to the previous day’s closing rate of N1,082.32. The intraday high reached N1264.96/$1, while the intraday low was N475/$1, reflecting a substantial spread of N789.96/$1.
Data obtained from the official NAFEM window indicated that forex turnover at the close of trading was $110.41 million, indicating a 54.49% decrease compared to the previous day.
However, in the parallel forex market, where forex is unofficially sold, the naira experienced a 0.40% depreciation, quoted at N1245/$1. Peer-to-peer traders quoted around N1261.57/$1.
Key Insights:
- Afreximbank recently released $2.25 billion from the $3.3 billion foreign exchange (FX) support facility to Nigeria’s FG to address the acute liquidity shortage in the country’s FX market.
- This significant agreement was officially signed on December 29, 2023, marking a milestone in the financial cooperation between the involved entities.
- Afrexim Bank, as the Mandated Lead Arranger, collaborated with United Bank for Africa, acting as the Local Arranger, to facilitate the $3.3 billion facility.
- NNPC Limited was the principal financier, with Guvnor and Sahara Energy as key participants.
- The first tranche of $2.25 billion will be deposited into a designated account at the Central Bank, aimed at easing forex liquidity pressures.
- UBA is functioning as the Onshore Depository Bank for this arrangement, and NNPC is facilitating the transaction’s financing.
- Major oil trading firms, including Sahara Energy, Vitol, Oando, and Gunvor, contributed $100 million to the facility, emphasizing the collaborative effort of multiple stakeholders.
