Naira Trades at N1,507.83 to Dollar Amidst $24 Billion Q1 Inflow Boost
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 significant $24 billion inflow in the first quarter of 2024.
Despite the day's trading activities, the naira depreciated by 0.47 percent, with the dollar quoted at N1,507.83 compared to N1,500.79 on Tuesday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to data from the FMDQ Securities Exchange Limited.
The dollar supply by willing buyers and sellers surged by 28.9 percent to $176.39 million on Wednesday, up from $136.75 million recorded on Tuesday. The intraday high closed at N1,523 per dollar, up from N1,507 the previous day, while the intraday low was quoted at N1,430.91, rising 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.
During an interview with Bloomberg on Tuesday, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), revealed that the country recorded a total foreign exchange (FX) inflow of $24 billion in the first three months of 2024. Nigeria’s external reserves, which empower the apex bank to defend the naira, increased by 2.97 percent year-to-date, reaching $33.70 billion as of June 25, 2024, up from $33.01 billion on January 2, 2024, according to CBN data.
In June 2024 alone, the Nigerian economy saw about $5.95 billion in inflows from the World Bank and Afreximbank.
Foreign exchange inflows refer to the movement of foreign currency into a country from various sources such as exports, foreign direct investment (FDI), remittances, foreign aid, and portfolio investments. Cardoso noted that the FX inflows for the first quarter of 2024 were approximately 50 percent higher than inflows recorded in previous quarters up to 2021.
The CBN governor highlighted the positive impact of the apex bank’s monetary policy tools on 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 said.
