Naira loses ground against Dollar as CBN speaks on forex sale to BDCs

The Nigerian currency halted its winning streak against the US dollar on Thursday, April 18, 2024, for the second time in a week, losing N81 to the dollar.

On Wednesday, April 17, 2024, the Nigerian currency inched closer to the N1,000 per dollar market in the official FDMDQ Exchange, trading for about N1,070 to a dollar.

Naira gains in the black market

The development led to speculations that the naira would trade below the N1,000 per dollar as predicted.

However, on Thursday, April 18, 2024, the naira crashed against the dollar in the official market, trading at N1,154.08 per dollar, shedding N81.

In the parallel segment of the foreign exchange market, the naira traded at N1,040 to a dollar as against the N1,100 it traded on Wednesday, April 16, 2024, gaining about N60.

The gap between the official and parallel market closed by N21 to a dollar. Traders in the official market quoted the spot rate of the naira as being at a high of N1,220 per dollar and a low of N1,000, leaving a disparity of N220.

CBN speaks on FX reserves

The development comes amid the Central Bank of Nigeria (CBN) 's denial that it uses external reserves to defend the naira.

The CBN governor, Olayemi Cardoso, said that the apex bank is not using foreign reserves to defend the local currency against depreciation.

Vanguard reports that Cardoso revealed this as reports say the nations FX reserves have lost about $2 billion, the highest in two years.

Cardoso said the loss of the countrys foreign reserves is due to debt repayment by the Nigerian government.