In a promising turn of events in the financial markets, the Naira has shown signs of strength against the US Dollar in the official foreign exchange market. This week, the Nigerian currency appreciated by 0.7%, marking a notable increase in value. According to the FMDQ Securities, on Monday, July 5, 2024, the Naira closed at N1,509.67 to $1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM), a slight improvement from last Thursday’s rate of N1,520.24 to $1. Despite this uptick, the volume of transactions saw a significant decline, dropping 32.6% to a total of $116.88 million from the previous session’s $173.51 million.
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However, the Naira did not fare as well against other major currencies in the official market. The Central Bank of Nigeria (CBN) data revealed that the Naira depreciated against the British Pound, closing at N1,935.24 to £1, down from N1,917.34 the day before. A similar trend was observed against the Euro, with the Naira falling from N1,638.75 to €1, a decrease of N14.41.
In the unofficial market, often called the black market, the Naira’s position weakened against the US Dollar. Traders reported a N5 depreciation from the previous day, with the Naira trading at N1,525 to $1. Despite these challenges, there is optimism for a more robust performance in the upcoming week.
This mixed performance comes amid a backdrop of improving foreign reserves, which recently exceeded $37 billion, instilling confidence in the Naira’s near-term prospects. Furthermore, the Nigerian government remains optimistic about the future of the currency. Ben Akabueze, Director-General of the Budget Office of the Federation, highlighted expected improvements in the Naira’s value due to anticipated increases in dollar supply and forthcoming economic reforms under President Tinubu’s administration.
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As the new week begins, stakeholders from various sectors keep a keen eye on these developments, hoping for a stable and strengthening Naira in official and unofficial markets.
