Market News

By Grace Alegba

Nigeria’s currency, the Naira, appreciated further against the dollar at the official foreign exchange market on Tuesday, trading at N1,351.02 against the American currency.

Data released on the Central Bank of Nigeria’s official website showed the local currency strengthened by N3.23 at the close of trading.

The appreciation of the naira against the dollar represents a 0.23 per cent increase compared with Monday’s rate, when the Naira exchanged at N1,354.25 to the dollar.

Analysts said the modest gain by the naira reflected improved liquidity and continued central bank interventions aimed at stabilising the foreign exchange market amid cautious investor sentiment.

Market watchers also expect movements of the Naira to remain gradual in the near term, as authorities balance reforms with efforts to boost confidence nationwide.

Trading volumes were moderate, with dealers monitoring policy signals closely.

The appreciation of the naira came in the wake of CBN’s approval of participation of licensed Bureau De Change (BDC) operators in the Nigerian Foreign Exchange Market (NFEM).

The CBN, in a circular signed by its Director, Trade and Exchange Department, Dr Musa Nakorji, said the move is part of efforts to improve foreign exchange liquidity in the retail segment of the market.

The circular said that the CBN had also approved that weekly FX purchases by each BDC be capped at 150,000 dollars, and that utilisation comply with existing BDC operational guidelines.

“All BDCs duly licensed by the CBN are permitted to access foreign exchange through any Authorised Dealer Bank of their choice, at the prevailing market rates.

The move aims to deepen market efficiency and ensure broader access to foreign exchange across the economy,” it said.

The CBN, however, imposed strict compliance and risk-management conditions on the transactions, including mandating authorised dealers to conduct full Know-Your-Customer (KYC) and due diligence checks on BDC clients before any FX sale.

The apex bank directed that all licensed BDCs must submit timely and accurate electronic returns in line with extant regulations to strengthen transparency and accountability

The circular further restricts settlement practices, mandating that all FX transactions be conducted through settlement accounts with licensed financial institutions.

It said that third-party transactions were prohibited, while cash settlement is limited to a maximum of 25 per cent of each transaction amount.