Breaking: Official exchange rate strengthens below N1,300/$1 for the first time since January

The exchange rate between the Naira and the Dollar closed at N1,278.58 on Tuesday, April 2, 2024, marking the first trading day on the official NAFEX market.

This closure below the N1,300 ceiling is the first occurrence since January 26 of this year.

On the official market, the exchange rate escalated from N891.9/$1 on that day to N1,348.62/$1 the following day, maintaining a closure above N1,300/$1 ever since. The Naira depreciated to as low as N1,615/$1 on March 13, 2024.

However, since the introduction of a slew of effective forex policies, the Naira has gained over 21% on the dollar since March. 

Key highlights

According to data from the FMDQ, the exchange rate closed at N1,278/$1 at the end of trading on Tuesday, up from approximately N1,309.39 a day earlier.

• The intra-day high was quoted at N1,312/$1, while the intra-day low settled at N1,250/$1.
• The average daily turnover reported was $111.8 million, down from the record $857 million recorded on the last official trading day in March.
• This also represents the slimmest exchange rate disparity observed between the intra-day high, intra-day low, and the closing rate, all falling under N130.

Meanwhile the exchange rate on the parallel market was even stronger at around N1,250/$1 according to various operators.

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The naira settled at N1,255/$, up from its February low of N1,915/$ at the Bureau De Change segment of the Nigerian FX market.

A series of circulars issued by the Central Bank of Nigeria in recent weeks and months have assisted in plugging leaks and closing loopholes previously utilized by currency speculators and racketeers.

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• After its biggest increase in almost 17 years, the CBN increased its monetary policy rate by 200 basis points, from 22.75% to 24.75%.
• A few weeks ago, the apex bank paid 26.06 percent for the one-year Treasury bill at its previous auction.
• However, investors anticipate that at the auction on Wednesday, yields will rise above secondary market quotes, which currently stand at 22.75 percent for the one-year bill and 20.06 percent for the benchmark 10-year note.

Nairametrics

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