The Nigerian naira opened the new trading week on a positive note, recording gains against the US dollar in the official foreign exchange market while showing mixed performance against other major currencies.
Naira Performance Across Major Currencies
According to data from the Nigerian Foreign Exchange Market (NFEM), the naira appreciated by N2.88 or 0.19% against the US dollar on Monday, November 24, closing at N1,453.84/$1 compared to Friday's rate of N1,456.72/$1. This marks a significant recovery for the local currency amid ongoing economic pressures.
However, the currency displayed varying performances against other global currencies. The naira weakened against the British pound, falling by N1.61 to close at N1,907.59/£1 from the previous session's N1,905.98/£1. In contrast, it recorded a marginal gain of 12 kobo against the euro, finishing at N1,678.17/€1 compared to N1,678.29/€1 on the prior trading day.
CBN's Strategic Market Intervention
The Central Bank of Nigeria took decisive action to support the national currency by injecting $250 million into the foreign exchange market. This substantial intervention comes amid rising demand for dollars, primarily driven by foreign payment obligations from companies engaged in external transactions.
This move represents a significant shift from recent capped sales of $50 million and is expected to help rebalance volatility and demand-supply dynamics in Nigeria's FX market. The intervention follows previous injections totaling more than $500 million into the foreign exchange market in recent weeks.
Parallel Market and Banking Sector Rates
While the official market showed improvement, the parallel market told a different story. Bureau de Change operators confirmed that the dollar was sold at a slightly higher rate of N1,505, compared to the previous day's rate of N1,500/$1.
Abdullahi, a BDC trader, provided insights into daily trading activities: "I sold the dollar at N1,468/$1 on Thursday to my customers, an increase from yesterday's rate of N1,453. I buy from my customers at N1,453. For other currencies, I sell the pound at N1,930 and the euro at N1,680, while I buy them at N1,900 and N1,650, respectively, depending on the amount."
In the banking sector, GTBank reported weaker naira performance against the dollar in the first session of the week, with the rate settling at N1,460/$1 from N1,457/$1.
Expert Analysis and Market Outlook
Financial analysts at Cowry Asset Limited attributed the naira's ongoing challenges to persistent demand pressures and systemic inefficiencies affecting price formation in Nigeria's foreign exchange market. These factors continue to create volatility despite the CBN's intervention efforts.
Meanwhile, Murtala Sabo Sagagi, a member of the Central Bank's Monetary Policy Committee (MPC), expressed optimism about the naira's future performance. In a personal statement following the committee's 301st meeting, Sagagi indicated that the naira is expected to strengthen further, supported by the central bank's strategic interventions.
According to FMDQ Exchange data, total foreign exchange inflows declined by 12% month-on-month, reaching $3.4 billion in August, highlighting the ongoing challenges in the market.
Official Exchange Rates for Major Currencies
The Central Bank released official exchange rates for various currencies as of Monday, November 24:
- US Dollar: N1,453.84
- Pounds Sterling: N1,907.59
- Euro: N1,678.17
- Japanese Yen: N9.27
- Yuan/Renminbi: N204.63
- Danish Krona: N224.68
- Riyal: N387.62
- South African Rand: N84.11
- Swiss Franc: N1,799.98
The continued volatility in the foreign exchange market underscores the importance of the CBN's intervention strategy in stabilizing the naira and supporting Nigeria's economic stability amid global economic uncertainties.
