Naira gains over N800 against the British Pound as CBN sells Dollar to BDCs at new rates

The Nigerian currency, the naira, regained most of its losses against the British Pound in 2024 at the parallel market as economic inflows grew.

On Thursday, April 4, 2024, the naira settled at N1,593 per pound, showing a gain of N821 from February 24, 2024, from N2,414 per pound against the pound.

The naira continues to recover against the dollar

On Thursday, April 4, 2024, the pound continued to trade above its one-week high of 1.2660 against the US dollar, according to data from NAFEM.

However, the Nigerian currency strengthened further on Thursday, April 24, 2024, against the US dollar by 0.62% as traders quoted the dollar at N1,255.07 in the official market, as against the N1,262.85 recorded on Wednesday, April 3, 2024.

Since the beginning of March 2024, the naira has continued to appreciate against major currencies, especially against the US greenback, rising from N1,612 in the official market in February to the current rate.

In the parallel end of the foreign exchange market, the naira has regained over N600 against the US dollar, trading at N1,250 from the almost N2,000 it traded at the beginning of February.

Currency dealers witness improved liquidity

According to reports, currency dealers say the excellent performance of the naira is due to a reduction in speculation as foreign forex hoarders, hit by CBN policies, offload their stash.

Analysts believe the CBN's payment of all verified FX backlogs is responsible for the massive recovery of the naira and market liquidity.

The naira has defied Goldman Sachs's and the Economist Intelligence Unit's (EIU) predictions of further depreciation.

The EIU said that the Nigerian currency would continue to fall and finally plateau at about N2,000 per dollar in 2024.

Analysts praise CBN's actions

Economist and banker Emeka Umejei said that CBN’s intentional moves controlled the fall of the naira.

He stated that the apex bank's various circulars and policies helped to a large degree in stabilising the local currency.

“For instance, the recall of currency dealers into the mainstream forex trading by CBN cannot be overlooked. The dealers also helped stabilise the naira.

“Also, the CBN's subtle intervention in selling Forex to BDCs is another contributory factor to the naira’s recovery. In the past, these guys were neglected, leading to FX scarcity as they traded mostly in the black market,” he said.