Naira Weakens Slightly to N1,604/$1 in Official Market, Stakeholders Optimistic About Stability

The naira closed at N1,604 to the dollar on Tuesday, slightly weaker from the previous day’s N1,599. The official market also saw a decline in the naira’s value against other major currencies, with the local currency trading at N2,115.25 to the British pound. In the parallel market, the naira traded at N1,618/$1, compared to N1,605 the day before. Despite these fluctuations, stakeholders in the foreign exchange market remain cautiously optimistic about the outlook.

Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria (ABCON), attributed the relative stability in the market to the ongoing reforms and interventions by the Central Bank of Nigeria (CBN). He emphasized that consistent CBN actions have improved liquidity and reduced volatility, thus fostering increased investor confidence. Additionally, domestic crude oil transactions in naira have alleviated pressure on the currency during high-demand periods.

Gwadabe further highlighted the positive impact of global developments, such as revisions and suspensions of U.S. tariffs, on the Nigerian market. He praised the CBN for its increased transparency, especially in disclosing a net foreign exchange position of over $6 billion, which has helped clarify market conditions and boosted confidence. The rise in diaspora remittances, reaching $20.98 billion, was another sign of the effectiveness of the CBN’s supply-side strategies.

However, Gwadabe cautioned that while there are positive indicators, the road to full stability remains a work in progress. He called for continued collaboration between fiscal and monetary authorities, stressing the need for comprehensive policies to address inflation and broader economic challenges. Gwadabe’s comments underline the importance of careful, ongoing reforms to secure long-term financial stability.

Source: the sun