Exchange rate peaks in 6 weeks, CBN policies yield success

The exchange rate between the Naira and the Dollar strengthened to N1,431/$ on Friday, March 22, 2024, closing the week on a positive note.

Data from the FMDQOTC, where the exchange rate is officially set, revealed that the official currency gained 1.52% at the close of business, continuing a rally that has now lasted 7 days.

The Naira has now gained over 12% in one week, suggesting the central bank’s policies, implemented aggressively since February, are beginning to show success.

What the data is saying

The exchange rate closed at N1,431/$1, the best rate since February 5th when it closed at N1419.86/$1

• According to the FMDQ, the Naira recorded an intra-day high and low of N1,468/$1 and N1,301/$1 respectively, while the NAFEX rate is currently N1,381.35/$1.
• Daily turnover was $199.7 million culminating in a total turnover of $1 billion this week alone suggesting that improved liquidity is now been experienced in the market.
• Nigeria’s external reserve position is currently $34.3 billion and is expected to rise to $35 billion according to projections from the apex bank.
• On the parallel market where the exchange rate trades unofficially, traders still quoted between N1400-N1480/$1 depending on who is buying or selling.
• The UK Pounds also fell below N2000/£1 in the parallel market.

CBN Interventions paying off

The Central Bank of Nigeria’s (CBN) recent policies have played a pivotal role in the strengthening of the Naira against the dollar, a trend highlighted by the significant appreciation in its value over the past week.