The Nigerian naira declined against the U.S. dollar at the official market, closing at N1,604.00/$1 on Tuesday, down from N1,599.00/$1 on Monday.
This is according to data from the Central Bank of Nigeria (CBN).
The local currency also weakened against other major currencies, trading at N2,115.25 to the British Pound, as reported by the apex bank.
In the parallel market, the naira faced further pressure, exchanging at N1,618/$1, compared to N1,605/$1 the previous day.
This data was obtained from currency traders at the Wuse Zone 4 area in Abuja, a major hub for retail foreign exchange transactions.
Stakeholders react
Despite the slight setback in exchange rates, stakeholders in the foreign exchange market remain optimistic.
- In a message to Nairametrics, President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadabe, attributed recent market stability and growing investor confidence to ongoing Central Bank reforms and interventions.
According to Gwadabe, “The sustained CBN intervention in the Nigerian Foreign Exchange Market (NFEM) has boosted liquidity supplies and helped in stemming the volatility and enhanced investors’ confidence.”
- He further noted that domestic crude oil transactions conducted in naira had reduced pressure on the local currency during periods of heightened demand.
“The continuation of crude oil sales in naira to local refineries has also doused the escalated demand pressure on the naira during the period of the volatility, which ab initio created tension in the market,” he said.
Gwadabe also highlighted global developments, including revisions and suspensions of U.S. tariffs on major trading partners, as calming factors that contributed to recent market gains. “Both global and local markets have responded positively with considerable appreciation,” he added.
- He commended the CBN’s increased transparency and data communication, particularly the disclosure of a net foreign exchange position of over $6 billion, which he said is giving the market more clarity and boosting confidence.
- Gwadabe pointed to an over 9% increase in diaspora remittances, now reaching $20.98 billion, as further evidence of the effectiveness of CBN’s shift toward supply-side strategies in the forex market.
“This underscores the resilience of the CBN measures on diversifying our sources of foreign exchange,” he remarked.
However, he cautioned that the journey to full stability is far from over. “Despite all these positive indices, it is still yet uhuru,” he stated.
He called for continued synergy between fiscal and monetary authorities and emphasized the importance of “humane policies and reforms” under President Bola Tinubu’s administration to combat inflation and address broader economic and security challenges.
Another Bureau De Change (BDC) operator called for more CBN interventions in the market.
Some analysts attribute this to the uncertainty surrounding ongoing government reforms and inconsistent access to official FX windows.
