US Dollar Supply Surge and Naira’s Resilience: A Weekly Market Roundup

Patrick OdeyFebruary 5, 2024

1 minute read

In a dynamic turn of events, the official foreign exchange market witnessed a staggering 180.59% surge in the supply of US dollars, soaring to $440.13 million. This sudden influx occurred as commercial banks hustled to sidestep potential regulatory sanctions from the Central Bank of Nigeria (CBN). Meanwhile, the Naira, despite a tumultuous week, appreciated marginally, closing at N1,435.53 per Dollar.

Data from FMDQ Security Exchange, reported on its official website, offers insights into the market dynamics as of the close of business on Friday. Additionally, the parallel market reflected a positive trend, with the Naira gaining ground and trading at 1,440 per US dollar on Friday, compared to N1,470 the previous Thursday.

Last week, the CBN issued a circular titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” expressing concerns about the escalating trend of banks holding significant foreign currency positions. In response, the apex bank mandated that banks’ Net Open Position (NOP) must not exceed 20% short or 0% long of the bank’s shareholders’ funds in future dealings.

This comprehensive weekly market roundup encapsulates the financial dynamics, regulatory shifts, and the Naira’s resilience in the face of evolving market conditions.