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The Nigerian naira began Tuesday’s trading session at N1,510 per dollar on the black market amid weakness in the dollar index.
However, the local currency settled higher in the Nigerian Foreign Exchange Market.
According to data released by the CBN, the naira’s indicative exchange rate dropped from N1,500 per dollar last Friday to settle at N1,499/$ in Monday’s trading session.
The loss followed three days of appreciation the previous week. The naira has remained comparatively stable against the dollar, and the foreign exchange market has become more transparent amid ongoing reforms by the Nigerian apex bank.
In addition, the Nigerian naira lost value in the official market during the worst trading session of the week, settling at N1,498.98 to the US dollar.
CBN’s data highlighted that the local currency dipped by N6.49 compared to Friday’s settlement rate. This is a drop of 0.43 percent from its closing price of N1,492.49/$ on Friday.
The CBN chief has repeatedly emphasized that the naira’s stability is critical and that the apex bank will continually intervene in the foreign exchange market while encouraging transparency.
Market efficiency has increased amid the recent implementation of the Nigerian Foreign Exchange Market FX Code and the Electronic Foreign Exchange Matching System. These tools have tamed volatility and speculation by increasing liquidity in the Nigerian foreign exchange market.
The dollar index was negatively impacted by a surprise decline in American consumer spending and increased geopolitical risks.
Investors were alarmed by the heated exchange between President Donald Trump and Ukrainian President Volodymyr Zelensky following the sudden cancellation of their scheduled press conference. Trump’s stern warning, “You are gambling on World War III, but you don’t have any cards in right now,” resulted in a rush to safe-haven assets.
source: nairametrics.com
