The naira has appreciated again to close below N1,600/$1 on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window.
According to data from the FMQD, Nigeria’s exchange rate closed at N1,596.52/$1 on the official market, which is the second time it is falling below the N1,600 ceiling this month.
The local currency is appreciating for the third consecutive day this week as protests against hunger and bad governance in Nigeria wane.
What the data says
Throughout this week, the naira has been strengthening in value against the dollar.
- The week started with the local currency appreciating by 0.62% to N1,607.15/$1 on Monday on the official market.
- By Tuesday, the naira appreciated again but at a slower rate by 0.38% to N1,601/$1.
- The currency appreciation slowed further as the naira rose in value by 0.28% to N1,596.52/$1 on Wednesday, August 7, 2024.
Nairametrics observed that this is the first time the local currency is appreciating thrice consecutively against the dollar in one week since May 2024.
The naira traded at a high of N1,628/$1 and a low of N1,520/$1, which shows some degree of volatility on the official market.
FX turnover rises for the first time this week
After dropping to the second-lowest daily average turnover this year yesterday, the foreign exchange (FX) turnover on the official market has recovered slightly.
It rose by 51.73% to $93.92 million from the $61.9 million recorded the previous day.
This is also the first time FX turnover has risen this week as it fell by 41.40% on Monday and 19.7% on Tuesday.
The increase in FX turnover coincides with the latest Retail Dutch Auction by the Central Bank of Nigeria (CBN), which happened earlier in the day.
What you should know
The Central Bank of Nigeria (CBN) sold $876.26 million at N1,495/$1 to 26 qualified banks in its latest Retail Dutch Auction. This is according to a statement signed by Dr Omolara Omotunde Duke, Director, Financial Markets Department.
In the statement, it was disclosed the auction was done to reduce the demand pressure in the foreign exchange (FX) market and promote price discovery.
According to the statement from the CBN, a total bid of $1.18 billion was received from 32 dealer banks. However, bids from six banks were disqualified, as four banks did not meet up with the deadline while two did not provide bids in their submitted templates.
Only about 75% of the total bid amount was supplied by the apex bank at the latest auction.
The latest FX auction is the biggest so far under Yemi Cardoso as the CBN governor.
