The naira on Tuesday steadied at 1,350 per US dollar on the parallel market as against Monday when it opened the foreign exchange (FX) market at the same rate before closing at N1,360/$1 on the same day at the black market.
At the official market known as the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira on Monday fell to 1,419.11 per dollar, the lowest since March 13, 2024 at the official FX market, following slowing inflows occasioned by the withdrawal of funds by Foreign Portfolio Investors (FPIs).
The intraday high closed at N1,451 per dollar on Monday, weaker than N1,410 closed on Friday. The intraday low also depreciated marginally to N1,060 on Monday as against N1,051/$1 closed on Friday at NAFEM, data from the FMDQ Securities Exchange indicated.
Dollars supplied by willing buyers and willing sellers declined by 52.16 percent to $147.83 million on Monday from $309.01 million recorded on Friday.
On day to day trading, the naira weakened by 5.63 percent as the dollar was quoted at N1,419.11 on Monday as against N1,339.23 quoted on Friday at NAFEM.
During the recent Monetary Policy Committee (MPC) meeting, Olayemi Cardoso,Governor of the Central Bank of Nigeria (CBN), emphasized the critical need to attract inflows to maintain liquidity in the foreign exchange market and stabilize the exchange rate.
In his statement, Governor Cardoso highlighted the importance of addressing inflationary pressures through exchange rate management to safeguard both price stability and long-term economic growth.
“Failure to tame inflationary pressure using the exchange rate channel may jeopardize not only price stability but also long-term growth,” stated Governor Cardoso.
Addressing concerns raised at the March 2024 MPC meeting, Governor Cardoso emphasized the need to reduce negative real interest rates to attract capital flows and enhance liquidity in the FX market. He stressed the significance of attracting capital flows through foreign portfolio investments and moderating exchange rate pressures to mitigate the impact of exchange rate pass-through on inflation, particularly in Nigeria’s import-dependent economy.
