In a notable turn of events on Wednesday, the Naira showcased resilience against the US dollar, experiencing a slight but impactful appreciation in the foreign market. FMDQ’s data revealed a gain, with the Naira trading at N1418.78 per US dollar, marking a 1.05% increase from the previous day’s N1,433.89.
While the parallel market witnessed a marginal loss, trading at 1,420 per US dollar, the overall outcome indicates that the Naira has retraced to its starting point for the week. This fluctuation follows a series of strategic interventions by the Central Bank of Nigeria (CBN), aiming to stabilize the Naira amidst recent challenges.
Just two weeks ago, the Naira took a different trajectory in the foreign market, a shift attributed to the CBN’s sweeping policy interventions. CBN Governor Olayemi Cardoso reported a remarkable increase in the country’s exchange market transactions, reaching $800 million, a milestone achieved for the first time.
Over the past week, the CBN implemented four pivotal policy reforms to counter the free fall of the Naira. Notably, the ‘Financial Markets Price Transparency and Market Notice of a revision to the FMDQ FX Market Rate Pricing Methodology’ weakened the Naira from N891.90 per US dollar on January 26th to N1,410 on Monday.
Furthermore, the CBN introduced guidelines to combat foreign currency hoarding and speculation, demonstrating a proactive approach to stabilize the market. The apex bank also issued fresh guidelines for International Money Transfer Operators in Nigeria, removing the cap on the exchange rate quoted by IMTOs.
As the Naira navigates these economic fluctuations, the recent interventions by the CBN underscore the dynamic landscape of Nigeria’s foreign exchange markets and the efforts to ensure stability amid challenges.