The Naira depreciates on the parallel market while gaining value at the official window

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The official forex market saw a strengthening of the naira on Monday, as Central Bank of Nigeria Governor Olayemi Cardoso assured ongoing efforts to address currency volatility.

The local currency appreciated by 1.09%, closing at 1,419.86/$, rebounding from the previous week’s low of 1482.57/$.

Despite positive movements at the official window, the parallel market showed the naira trading between 1,440/$ and 1,460, influenced by hoarding activities, according to Bureau de Change operators.

Cardoso highlighted the central bank’s initiatives to improve FX supply, address bottlenecks, and make naira assets appealing to foreign investors, emphasizing the need for economic stability and growth.

Cardoso also revealed progress in settling verified FX requests, with $2.3bn already addressed and the remaining N2.2bn to be paid shortly.

He addressed concerns over the $7bn backlog, stating that $2.4bn had issues, including invalid import documents and discrepancies in allocation.

In September 2023, Nigeria faced a downgrade by FTSE Russell due to challenges in foreign investors repatriating funds, prompting the central bank to initiate clearing of FX backlog in banks starting November 2023.

 

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