How the naira appreciated in the official market amid X sales by CBN

• The Nigerian currency, the naira, recovered slightly against the US dollar on Tuesday, July 16, 2024
• Currency dealers in the official market quoted the dollar at N1,576.66 to a dollar as against the N1,5677 it traded the day before
• The naira also crashed in the parallel market, trading at N1,580 to a dollar on Tuesday, July 16, 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

The naira made a marginal recovery against the US dollar on Tuesday, July 16, 2024, after plummeting near N1,600 to a dollar on Monday, July 15, 2024.

Traders quoted the official dollar exchange rate at N1,576.66, up from the N1,577 it traded the day before.

Naira stages a slight recovery against the dollar in the official market Credit: Bloomberg/Contributor
Source: Getty Images

Currency dealers quoted the dollar at a high of N1,592 to a dollar and a low of N1,492.

FX turnover rises in the official market

Data from the FMDQ Exchange shows that foreign exchange turnover recorded a marginal improvement at $138.17 million.

Meanwhile, the naira crashed in the parallel markets on Tuesday, July 16, 2024, selling at N1,580 naira to the dollar.

Forex dealers on the streets said there was increased demand for the dollar by importers and others seeking to travel or pay medical bills overseas.

CBN sidelines BDCs in FX sales

The development comes amid recent FX sales by the Central Bank of Nigeria to authorized dealers.

Bureau de Change operators (BDCs) were not part of the CBN's latest tranche of FX sales to authorized dealers.

The President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadebe, disclosed this recently.

He said only commercial banks received the latest intervention by the CBN.

He disclosed that it is the usual CBN's intervention at the Nigeria Autonomous Foreign Exchange Market window (NAFEM), which presently excludes BDCs.

The apex bank began selling FX worth about $122.67 million to 46 authorized dealers as part of a major step to stabilize the FX market and the Nigerian currency, the naira.

Punch reports that authorized dealers include the banks and BDCs, which were usually targets of CBN's FX sales in the past.

Also, Nigeria's external reserves have risen again, hitting $35.05 billion as of July 8, 2024.

Data from the Central Bank of Nigeria indicates that Nigeria's reserves have increased since July 2024.

Reserves hit the highest for the first time under Tinubu

Analysis shows that the country's reserves reached their highest level since May 30, 2023, at N35.09 billion, 14 days before the naira devaluation and foreign exchange unification of June 2023.

This is the first time under President Bola Tinubu that the country's reserves crossed that threshold.

According to analysts, the FX policies of the CBN may have boosted the FX reserve, including financial commitment from Afreximbank and the World Bank via loans. 

CBN gives new exchange rates to clear goods

Legit.ng reported that The FX rate for Customs duties has increased from N1,520 per dollar to N1,558.

The current figure represents an increase of N38 from the previous rate and is higher than the closing rate of the naira against the dollar, which is N1,554.66 per dollar.

The Nigerian currency had crashed during the week to N1,561 to the dollar in the official market.

Source: Legit.ng