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The Nigerian currency has seen a consistent rise against the US dollar for the fourth consecutive week following its devaluation in January 2024. In the parallel market, the naira appreciated to approximately N245 per dollar compared to the US greenback, prompting calls from currency dealers for the Central Bank of Nigeria (CBN) to reassess its dollar selling price.
The Association of Bureaux de Change Operators of Nigeria (ABCON) has urged the CBN to lower its buying rate for the US dollar to accelerate recovery. According to ABCON, the current buying rate of N1,251 per dollar set by the CBN would lead to losses for its members, given that the naira is currently trading at N1,235 per dollar in the open market. This discrepancy was highlighted in a letter addressed to the CBN’s trade and exchange department director, signed by ABCON President Aminu Gwadabe.
Notably, this marks the first time that the CBN’s buying rate exceeds the open market value, underscoring the challenges faced by currency dealers. The local currency closed last week at N1,251 per dollar, marking its lowest point since February 2024.
Data from NAFEM indicates that on Friday, April 5, 2024, currency traders quoted the naira at an intraday high of N1,281 per dollar and a low of N1220. Analysts attribute the naira’s recovery to various policies and circulars implemented by the apex bank aimed at enhancing market liquidity.
One significant move by the CBN includes the commencement of foreign exchange sales to Bureau de Change operators (BDCs) at N1,251 per dollar. This initiative has contributed to the naira’s resilience despite earlier predictions by the Economist Intelligence Unit (EIU) and Goldman Sachs, which anticipated a plateau around N2,000 and N1,200 per dollar in 2024.
The CBN’s recent settlement of the $7 billion verified Forex backlog is also credited with alleviating pressure on the local currency. As a result, the naira has experienced notable gains against major currencies, appreciating by approximately N800 against the British pound and N660 against the US dollar since February 2024.
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