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Volatility: Naira Appreciates To N1,671.32/$1 On Official Market - NEW TELEGRAPH
The naira rose against the dollar on the official market on Tuesday, closing at N1,671.32/$1 compared with N1,676.90/$1 the previous day, data from FMDQ shows.
The local currency also strengthened on the parallel market yesterday, rising to N1,725 per dollar compared with N1,735 per dollar on the previous day, according to currency dealers.
In its latest rating report on Nigeria published over the weekend, leading credit rating agency, Fitch Ratings, said that despite the Central Bank of Nigeria’s (CBN) reform measures, the country is still grappling with fx market instability.
The naira rose against the dollar on the official market on Tuesday, closing at N1,671.32/$1 compared with N1,676.90/$1 the previous day, data from FMDQ shows.
The local currency also strengthened on the parallel market yesterday, rising to N1,725 per dollar compared with N1,735 per dollar on the previous day, according to currency dealers.
In its latest rating report on Nigeria published over the weekend, leading credit rating agency, Fitch Ratings, said that despite the Central Bank of Nigeria’s (CBN) reform measures, the country is still grappling with fx market instability.
The report stated: “The Central Bank of Nigeria is initiating several measures to address FX liquidity challenges and formalise FX activity to support the currency. These include plans to introduce an electronic FX matching platform for all FX transactions effective December 1, 2024, to provide intra-day prices in real-time and enhance transparency.
The CBN has also raised the monetary policy rate five times by a cumulative 850bp to 27.25 per cent since February 2024. However, Fitch believes that the FX market has yet to stabilise, and the ongoing flexibility of the exchange rate remains to be tested.”
Commenting on the increase in Nigeria’s gross foreign exchange reserves, which, it noted, rose to $39 bn in mid-October from a low of $32.1 bn in midApril, the rating agency attributed the accretion to official disbursements, remittances, portfolio inflows, and an improved trade balance.
“We forecast FX reserves to rise to 6.1 months of current external payments at end-2024 (‘B’ median 3.7) and to average 5.3 months in 2025-26,” Fitch stated. The agency, however, questioned the true net reserves position, pointing out that about a quarter of current gross reserves are comprised of FX swaps with local banks.
