The naira has witnessed a notable appreciation at both the official and parallel markets following the Central Bank of Nigeria's (CBN) successful clearance of all foreign exchange (FX) backlogs.
Data from the FMDQ Securities Exchange indicates that the Naira closed trading at ₦1,410/dollar at the parallel market and ₦1,492 at the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday, marking a 4.55% increase from the previous day's rate at NAFEM. This surge represents a 13.5% gain or ₦190 at the parallel market.
The increased dollar supply has alleviated pressure on the Naira/dollar exchange rate, coinciding with significant growth in Nigeria's external reserves, which rose by 3.62% to $34.37 billion as of March 12, 2024. The appreciation in the Naira has been attributed to the CBN's crackdown on forex activities and reduced demand by prospective buyers, prompting speculators to offload dollar stocks.
President Bola Tinubu's administration had pledged to clear the inherited forex backlogs, with CBN Governor Olayemi Cardoso confirming the clearance of $1.5 billion recently, reaffirming the commitment to address all outstanding forex obligations.
