Since the Central Bank of Nigeria introduced the FX code on the Nigerian Foreign Exchange Market (NFEM), the naira has appreciated on all foreign exchange (FX) markets in the past two days.
This comes after the Central Bank of Nigeria (CBN) promised to start full settlements of the $7 billion backlog of foreign exchange obligations shortly.
At the official close of the foreign currency market, the naira’s value strengthened even more, closing Thursday at N1500.78 to the US dollar.
By the end of Monday’s trading session, the value of the naira had dropped to N1,534.54 from its starting point of N1,533.26 to the dollar. Following the release of the Nigeria Foreign Exchange Code, the value of the naira started to rise by the end of Tuesday.
On Wednesday, it increased even more to N1,508.39 to the dollar, and on Thursday, it closed at N1,500.78. On Thursday, the naira closed at N1,635 to the dollar, reversing some of its gains at the parallel market.
On the parallel market, the naira started the week’s trading activities at N1,660 to the dollar. On Monday and Tuesday, it rose to N1,650 and N1,640 to the dollar, respectively. The value of the currency increased to N1,630 to the dollar at the end of business on Wednesday.
The CBN governor, Olayemi Cardoso, revealed at the Nigeria Foreign Exchange Code introduction on Tuesday that the forensic verification process for the foreign exchange backlog is almost over and that final settlements will be handled appropriately.
He also noted that a period of unethical market activities and systemic abuse is coming to an end as a result of the foreign currency reforms, including the FX Code.
TimesNow.com.ng reported that participants in the foreign exchange market have been instructed by the Central Bank of Nigeria to submit compliance reports by January 31, 2025, detailing their adherence to the Nigeria FX Code.
The directive is a component of initiatives to improve market transparency, governance, and moral behaviour.
With its implementation on December 2, 2024, the Nigeria FX Code lays out best practices to guarantee a strong, equitable, and open foreign exchange market.
Proofreading by Nkem Ikeke, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
