On Wednesday, the naira exchanged at N1,507.83 per dollar at the official foreign exchange (FX) market, reflecting improved liquidity as Nigeria recorded a substantial $24 billion inflow in the first quarter of 2024. Despite the increased inflow, the naira experienced a slight depreciation of 0.47 percent from the previous day’s rate of N1,500.79 at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from FMDQ Securities Exchange Limited.
The trading day saw the dollar supplied by willing buyers and sellers rise by 28.9 percent to $176.39 million from Tuesday’s $136.75 million. The intraday high reached N1,523 per dollar on Wednesday, compared to N1,507 on Tuesday, while the intraday low was quoted at N1,430.91, up from N1,426 per dollar.
In the parallel market, commonly known as the black market, the naira traded between N1,498 and N1,505 per dollar.
Nigeria’s external reserves, which bolster the Central Bank of Nigeria’s (CBN) ability to defend the naira, increased by 2.97 percent year-to-date, reaching $33.70 billion as of June 25, 2024, from $33.01 billion recorded on January 2, 2024, according to CBN data.
The Nigerian economy recorded approximately $5.95 billion in inflows from the World Bank and Afreximbank in June 2024 alone. Foreign exchange inflows, which represent the movement of foreign currency into a country, come from various sources such as exports, foreign direct investment (FDI), remittances, foreign aid, grants, and portfolio investment.
The Governor of the Central Bank of Nigeria, Yemi Cardoso, highlighted that the FX inflows for the first quarter of 2024 are approximately 50 percent higher than the inflows recorded in previous quarters up to 2021. Cardoso attributed this increase to the effective use of monetary policy tools by the apex bank, which are positively impacting the FX market. “These tools are having a positive impact. Therefore, we believe that by continuing on this path, liquidity will continue to grow,” he stated.
As Nigeria continues to navigate its economic challenges, the increased liquidity and substantial foreign exchange inflows provide a hopeful outlook for the naira’s stability and the broader economic landscape.
