In February, the naira made a significant resurgence and achieved one of its largest gains in recent months.
On the parallel market, the local currency started February at N1,640 to the US dollar and ended the month at N1,495 to the US dollar, a gain of N145.
The naira began the month of February at N1,620 and ended the month at N1,492 in the official market.
According to FX analyst Michael Nwadike, FX speculators lost more than N10 billion during the recent naira rise and would continue to lose as holders of the greenback dump it on the open market.
He claims that with the launch of the Electronic Foreign Exchange Matching System (EFEMS), which is supported by the Central Bank of Nigeria (CBN), the days of forex speculation and market distortions in the domestic foreign exchange market are over.
The FX policy’s adoption had a variety of effects on all financial market segments that deal with foreign exchange, including a recovery in the value of the naira in all markets.
Aminu Bakori, one of the dealers, expressed his surprise at the naira’s ability to record such a gain in such a short amount of time.
He said that the naira is benefiting from the CBN’s decision to prolong the $25,000 weekly sale to Bureaux De Change (BDCs) at the Nigeria Foreign Exchange Market (NFEM) by four months.
According to him, the purpose of selling dollars to BDCs at the official market rate was to help the operators satisfy the growing demand for foreign currency.
Bakori said:
According to other FX operators, the continuous application of FX Code has put an end to the period of forex speculation and market distortions in the domestic foreign currency market.
But retired CBN Director Prof. Jonathan Aremu has cautioned that it’s too soon to celebrate.
Aremu is an ECOWAS Regional Expert on Trade and Investment in addition to being a professor of international economic relations at Covenant University.
Aremu demanded more output in order to maintain the Naira’s gains.
He characterized the currency’s consistent rise in value relative to the US dollar as a good thing.
In order to preserve stability, he advised the CBN to concentrate on increasing economic productivity.
He asserts that the apex bank need to take into account variables that affect production and liquidity in addition to interest rates.
TimesNow.com.ng reported that the Central Bank of Nigeria (CBN) has crashed the Customs foreign exchange rate for cargo clearance slightly above the official window.
CBN fixed the daily Customs exchange rate at N1,498 per dollar, down from N1,500 the previous day.
