Naira depreciates to N850.22/$1 at official FX, Tuesday

Naira strengthens to N1400/$ on parallel market

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The naira on Wednesday exchanged for N1400 against the United States dollars in the parallel market.

Parallel market operators sold at N1400/$1 for holders of dollars looking to sell, marking a significant strengthening of the naira.

Nairametrics indicated that the exchange rate has been gaining lately as speculators start to dump their hoard of dollars following waning demand.

This represents an N12 gain on a day-to-day basis. The figure indicated a whooping N57.36 gain compared to N1,617.96 per USD traded barely a week ago.

The naira had maintained it below the N1,600 per USD mark for the second day in a row, a threshold it had previously sustained for nine days since March 5th, 2024.

Meanwhile, the exchange rate on the official market fell to N1,560/$1 on Tuesday the strongest the naira has traded since the 4th of March when it closed at N1534/$1.

The Central Bank on Tuesday announced the date for its next Monetary Policy (MPC) meeting where it would deliberate whether to hold MPR or continue the hike. At its last meeting, the apex bank went bullish on interest rate raising MPR by 400 basis points to 22.75%, the highest single increase on record.

Also, the foreign investors’ appetite for CBN’s OMO auction and Nigeria’s Treasury bills might be connected to the recent gains of the naira in the past few days.

The apex bank had earlier reported that foreign investors dominated Treasury bills and OMO auctions as about 75% of subscribers were foreigners.

Furthermore, the bank noted that there has been significant forex inflow in the past month as remittances from Nigeria’s diaspora reached $1.3 billion in February from just $300 million received in the preceding month marking a fourfold increase.

 

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