OMG, naira falls again, crosses N1,500/$ in official, black market

• On Wednesday, the value of the naira remained weak, fluctuating on the black market between N1,498 and N1,505 per US dollar
• World Bank and Afreximbank provided the Nigerian economy with over $5.95 billion in funding in a single month, June 2024
• The CBN governor stated that the top bank's use of monetary policy tools is helping the foreign exchange market

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Nigeria's currency, the naira, continued its weakness on Wednesday, trading between N1,498 to N1,505 per dollar on the black market, or parallel market, despite $24 billion in inflows during the first quarter of 2024.

The nation registered a $24 billion in total foreign exchange inflow in the first three months of 2024. Photo Credit: Naira
Source: Getty Images

The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, stated in a Tuesday interview with Bloomberg that the nation registered a $24 billion in total foreign exchange (FX) inflow in the first three months of 2024.

The Nigerian economy received approximately $5.95 billion in funding from the World Bank and Afreximbank in a single month, June 2024.

More on foreign transfer

BusinessDay reported that foreign currency transfer into a nation is referred to as a foreign exchange inflow. These inflows can originate from a number of places, including exports, which are the sales of goods and services by a nation to other nations in exchange for foreign exchange.

Another source of inflow is foreign direct investment (FDI), which refers to investments made in domestic firms by foreign corporations through things like factory setup, real estate purchases, and ownership holdings in local businesses. International exchange inflows can also come from grants, remittances, international aid, and portfolio investments.

Cardoso reported that compared to the inflows recorded in the prior quarters u until 2021, the foreign exchange inflows for the first quarter of 2024 are almost 50% greater.

The CBN governor declared that the FX market is benefiting from the apex bank's deployment of monetary policy instruments.

He said,

According to data from the FMDQ Securities Exchange Limited, the naira lost 0.71 percen of its value when the dollar was quoted at N1,500.79, which was less than the N1,490.20 quoted at the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Monday.

The local currency had stabilised at N1,490 for about a month as end consumers' desire for dollars moderated.

CBN reportedly ends forex sales to BDC

Legit.ng reported that a new report has indicated that the Central Bank of Nigeria (CBN) may have finally stopped funding Bureau de Change Operators (BDCs).

The report, which emerged recently, states that the apex bank wants to further liberalise the FX market by testing its reform template and minimise quick fixes by applying mechanical approaches to institutional processes in FX market management.

The report said the CBN is currently reviewing significant policies to strengthen the implementation or tweak its reforms.

Source: Legit.ng