The naira, Nigeria’s currency, has gained value and is now worth less than 1,600 naira for 1 US dollar on the Nigerian Autonomous Foreign Exchange Market (NAFEM) window.
According to data from the Financial Market Quotation Display (FMQD), Nigeria’s exchange rate was 1,596.52 naira for 1 US dollar on the official market. This is the second time the value has dropped below 1,600 naira this month.
The naira has been getting stronger for three days in a row this week as fewer people protest about hunger and bad governance in Nigeria.
What the data says
This week, the naira has been getting more valuable compared to the dollar.
- On Monday, the week started with the naira gaining 0.62%, which made it worth 1,607.15 naira for 1 dollar on the official market.
- By Tuesday, the naira gained more value, but at a slower rate of 0.38%, making it worth 1,601 naira for 1 dollar.
- On Wednesday, August 7, 2024, the naira’s growth slowed even further, increasing by 0.28%, making it worth 1,596.52 naira for 1 dollar.
This is the first week since May 2024 where the naira has gained value three times in a row against the dollar.
During this time, the naira was traded at a high of 1,628 naira for 1 dollar and a low of 1,520 naira for 1 dollar, showing some ups and downs in the official market.
FX turnover rises for the first time this week
After hitting the second-lowest daily average turnover this year yesterday, the foreign exchange (FX) turnover on the official market has improved slightly.
It increased by 51.73%, reaching 93.92 million dollars compared to the previous day’s 61.9 million dollars.
This is the first time this week that FX turnover has risen after falling by 41.40% on Monday and 19.7% on Tuesday.
This increase in FX turnover happened on the same day as the latest Retail Dutch Auction by the Central Bank of Nigeria (CBN).
What you should know
The Central Bank of Nigeria (CBN) sold 876.26 million dollars at 1,495 naira for 1 dollar to 26 qualified banks in its latest Retail Dutch Auction. This information is in a statement by Dr. Omolara Omotunde Duke, Director of the Financial Markets Department.
The statement said that the auction was done to reduce pressure on the foreign exchange market and help find a fair price for the naira.
According to the CBN, they received bids totaling 1.18 billion dollars from 32 dealer banks. However, six banks were disqualified: four missed the deadline, and two did not provide correct bids.
About 75% of the total bid amount was provided by the Central Bank in this auction.
This is the largest FX auction under the current CBN governor, Yemi Cardoso.