The naira appreciated N1,510 in the official market and N1,625 in the parallel market after the CBN launched its FX Code to enhance liquidity and transparency. This development comes amid a $1.13 billion drop in Nigeria’s external reserves, as the CBN aims to stabilize the volatile FX market.
The naira strengthened against the dollar in the official and parallel markets after the Central Bank of Nigeria launched the FX Code. This move aims to enhance market liquidity and transparency, despite Nigeria's external reserves declining by $1.13 billion to $39.79 billion by the end of January.
The Nigerian foreign exchange (FX) market has witnessed a sharp decline in the dollar’s value following the launch of the Central Bank of Nigeria’s (CBN) FX Code. On January 29-30, the naira appreciated by 1.5% in the official market, with the dollar dropping from N1,533.63 to N1,510.72. This move marked a significant shift, as the naira also gained against the dollar in the parallel market, where the dollar fell to N1,625 from N1,634.
The FX Code, introduced by the CBN, aims to improve market liquidity, transparency, and the overall functioning of Nigeria’s FX sector, following the principles of good practices observed in global markets. This comes as Nigeria’s external reserves have dipped by $1.13 billion, from $40.92 billion on January 6 to $39.79 billion by January 28.
The introduction of the FX Code is seen as a response to address the risks present in the financial system and to stabilize the country’s exchange rate market amid market speculation and volatility.
