By Milcah Tanimu

The foreign exchange (FX) market resumed trading after the Easter holiday, witnessing the Naira appreciating to 1,238.3 against the dollar at Bureau De Change (BDC) operators. BDCs bought at N1,220 per dollar, while cash and transfer transactions were conducted at N1,265/$.

Further strengthening was observed on the parallel market, where the Naira reached 1,225 per dollar, signaling a 1.99 percent appreciation from the previous week’s close of N1,280.

This positive momentum in the Naira’s value across both official and parallel market segments can be attributed to the Central Bank of Nigeria (CBN)’s successful clearing of all verified FX backlogs, amounting to the final tranche of $1.5 billion.

March 2024 saw a significant 21.8 percent month-on-month appreciation of the Naira, a trend expected to continue into April due to continued policy measures by the CBN.

Afrinvest Securities Limited’s report highlighted a 21.8 percent month-on-month strengthening of the Naira against the base currency, with further gains noted in the parallel market segment.

In April, analysts anticipate the Naira to trade within similar bands as the CBN maintains efforts to mop up liquidity and attract capital inflows through increased Open Market Operations (OMO) sales, prompted by a 200 basis points hike in the Monetary Policy Rate (MPR) to 24.75 percent.

Aminu Gwadabe, President of the Association of Bureaux de Change Operators of Nigeria (ABCON), cited monetary policy tightening, increased investment in government instruments, and the recall of BDCs as factors contributing to enhanced dollar liquidity in the retail segment of the forex market.

As the Naira continues its positive trajectory, stakeholders remain optimistic about sustained stability and improvement in the FX market.