CBN’s Intervention Spurs Naira Appreciation in Parallel Market

The concerted efforts of the Central Bank of Nigeria (CBN) to counter the downward spiral of the naira against foreign currencies have yielded promising results, as the national currency saw a notable uptick against the dollar in the parallel market on Tuesday.

Having registered at N956/$ just the previous day, the naira showcased a resilient performance, trading at N925/$ in the parallel market. Insider sources disclosed that naira transactions were conducted within the range of “N915/$ and N925/$.”

Meanwhile, in the Investors & Exporters (I&E) window, the day’s trading commenced at 785.89/$, eventually peaking at 799.90/$ before ultimately closing at 774.77/$, a surge from the previous day’s closing rate of 764.68/$.

The CBN’s active stance in the face of the naira’s depreciation gained further momentum with the announcement by acting CBN Governor Folashodun Shonubi. Speaking after a briefing with President Bola Tinubu, Shonubi clarified that the fluctuations in the parallel market are not solely a product of economic factors, but also encompass speculative demand.

Revealing that the CBN is crafting an upcoming policy designed to bridge the gap between official and black market rates, Shonubi emphasized that this policy could potentially lead to significant losses for speculators. He asserted that the ongoing volatility in the parallel market is not only rooted in supply and demand dynamics but is also significantly influenced by speculative elements.

The recent strengthening of the naira in the black market, coupled with the CBN’s strategic measures, paints a cautiously optimistic outlook for the nation’s currency, aiming to create a more stable and balanced exchange rate landscape.

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