Naira stands strong against US Dollar as CBN begins $61m settlement to airlines

The naira has shown resilience against the dollar, starting the second week of the year on a good note.

Official data by the Nigerian Autonomous Foreign Exchange Market (NAFEM) shows that the naira appreciated by 1.47% to close at N856.57 per dollar on Monday, January 9, 2024.

This is against the N869.13 per dollar it closed the previous day.

During the trading day, the intraday high was quoted at N1,185 per dollar, while the intraday low was N720 per dollar, according to the FMDQ.

In a similar operation, the naira also gained in the unofficial market to quote at N1245 per dollar on Monday.

This amount signifies a 0.80% appreciation from what its closed the previous day.

CBN settles $61.64m Forex backlog

The gain witnessed in the market is amid reports that the Central Bank of Nigeria (CBN) disbursed $61.64 million to foreign airlines through various banks.

This brings the total backlog of forex cleared in the last three months to $2 billion, according to a New Telegraph report.

Hakama Sidi Ali, CBN acting director of the corporate communications department, said:

“In fulfilment of its commitment to eliminate the backlog of pending matured foreign exchange in Deposit Money Banks (DMBs), the Central Bank of Nigeria (CBN) has recently disbursed approximately US $61.64 million to foreign airlines through various banks.” On how the development would impact the naira, she said:

“It is anticipated that this initiative by the CBN should provide a considerable boost to the Naira against other major world currencies and further increase investor confidence in the Nigeria economy.”

Samuel Oyekanmi, a macroeconomic analyst, said the development restores some confidence in the Nigerian FX system for foreign investors, especially in the aviation industry. He added:

“It also sends a signal of FX liquidity in the economy, hence reducing the pressure on the exchange rate both at the official and parallel FX market.”