Naira appreciates by 2.3% against US dollar as CBN ends forex ban on 43 items

The Nigerian currency had a mixed trading performance in the foreign exchange markets following the Central Bank of Nigeria's decision to lift the ban on 43 items.

Nigeria has several foreign exchange markets, such as the official Investors and Exporters (I&E) window, along with two unofficial needs known as the parallel and peer-to-peer markets.

Data obtained from FMDQ securities showed that at the I&E window, Naira closed at N759.20/$1 on Thursday, October 12, 2023.

This represents a 2.3 per cent or N17.60 appreciation for Naira compared to the N776.80/$1 exchange rate on Wednesday, October 13, 2023.

This happened as there was a significant rise in the value of FX by 1,302.8 per cent or $378.60 million to $407.66 million from the midweek session's $29.06 million in the official window.

Also, in the official market, CBN data showed that the Naira appreciated against the Pound Sterling by N4.97 during the session to sell at N942.64/£1 versus the previous day's N947.61/£1 on Thursday.

In the same vein, Naira gained N4.12 against the Euro to close at N813.12/€1 versus N817.24/€1.

It was a different story for the Naira on the black market as it lost more of its value against the US dollar.

In the Peer-to-Peer (P2P) window yesterday, the domestic currency depreciated against the US Dollar further weakened by N13 to close at N1,041/$1 compared with the previous day's N1,028/$1.

Tribune reports that in the black market, the value of the domestic currency against the dollar depreciated further to trade at N1,050/$1, in contrast to Wednesday's exchange rate of N1,030/$1.

Reacting to the CBN decision, Ayodeji Ebo, managing director/chief business officer at Optimus by Afrinvest, said the move was long overdue and that the bold step was commendable and would result in naira appreciation in the parallel market.

Micheal Ani, Manager of Investor Relations Dangote Cement, also shared the same view with Ebo.

He said the CBN ban in the last eight years has adversely affected Naira.

He mentioned that lifting the ban on the 43 items will ease the current pressure witnessed in the black market.

His words: "This is long overdue and very thoughtful of the CBN to lift the restriction on the 43 items earlier banned from accessing FX in the I&E Window.

"The next step should be to secure an IMF facility to clear the huge backlog of unmet dollar demand."