Analysts predict that the stability of Nigeria’s currency, the naira, will hinge on the Central Bank of Nigeria (CBN) sustaining its supply of dollars to authorized dealers in the official foreign exchange (FX) market. Despite recent interventions, the naira has faced pressure in both official and unofficial FX markets.
On Monday, the naira depreciated by 0.86 percent against the dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM), with strong demand observed from individuals planning summer travel. Meanwhile, at the parallel market, the naira fell by N5, trading at N1,565 per dollar.
The CBN, in its effort to bolster the naira, disclosed selling $67.5 million to 27 authorized dealers on July 10, 2024, with additional transactions reported on subsequent days. Analysts like Muda Yusuf emphasize that the consistency and sustainability of such interventions are crucial to building confidence and preventing speculation against the naira.
Ayodele Akinwunmi from FSDH Merchant Bank anticipates a positive impact on the naira’s value over the coming weeks if the CBN maintains regular supply to the market.
The CBN, through its director Omolara Duke, reaffirmed its commitment to stabilizing the FX market and urged dealers to use purchased foreign exchange exclusively for trade-backed transactions.