Naira closes flat as dollar supply hits two-month high of $556.25 million

The naira closed stable against the US dollar on Friday, ending the week marginally strong in the official foreign exchange (FX) market, as dollar supply rose to a two-month high of $556.25 million.

The dollar supplied by willing sellers and buyers, including commercial banks, rose significantly on Friday by 231.99 percent to $556.25 million, up from $167.55 million recorded on Thursday.
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The last time the currency market recorded an increase in dollar supply was on March 28, 2024, when it jumped to $857.78 million.

After trading on Friday, the naira gained slightly by 0.19 percent as the dollar was quoted at an exchange rate of 1,482.81 naira compared to 1,485.66 naira quoted on Thursday at the Autonomous Market of Nigerian Foreign Exchange (NAFEM), according to FMDQ data. Stock Exchange Limited.

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The forex market summary released by the FMDQ showed that the intraday high closed at N1,519 per dollar, weaker than the N1,510 quoted on Thursday. The intraday low closed flat at N1,400 on Friday against N1,401 quoted on Thursday.

The local currency appreciated 0.67 percent against the dollar in the parallel market, also known as the black market. The naira was quoted at N1,500 on Friday, against N1,510/$1 quoted on Thursday.

Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), during the Monetary Policy Committee (MPC) briefing in Abuja, said members of the Committee noted the recent volatility in the foreign exchange market and attributed it to seasonal demand , a reflection of the interaction between supply and demand in a freely functioning market system.

The Committee also took note of the marginal increase in the external reserve balance between March and April 2024 and urged the Bank to maintain its focus on reserve accumulation.

The MPC commended the Central Bank for the recent approval of licenses of 14 international money transfer operators (IMTOs). This is expected to improve competition and reduce the cost of transactions, thereby attracting more remittances through formal channels.