By Adedapo Adesanya
The Naira strengthened against the Dollar on Friday at the Peer-to-Peer (P2P) segment of the foreign exchange (FX) market after news emerged on Thursday that the Central Bank of Nigeria (CBN) has commenced the clearance of forex backlogs.
This step was taken by the central bank to boost the value of the Naira in the currency market after plunging to a low of about N1,300/$1 some days ago in the parallel market and the P2P.
At About 1:30 pm on a popular crypto exchange platform, Binance, the local currency was traded against the greenback at N864.19/$1 compared with Thursday’s closing rate of N1,024/$1, indicating that it has gained N159.81. Earlier this morning, it was exchanged at N974/$1.
Yesterday, there were reports that the apex bank was clearing a $7 billion backlog of matured foreign-currency forward transactions that have weighed on the Naira.
The exchange rate on Binance reflects conditions on the parallel market, where the forces of demand and supply determine the rate, compared with the official market, where the authorities influenced pricing before reforms were introduced in June.
President Bola Tinubu late last month assured Nigerians and investors that there is an ongoing plan to boost the country’s foreign exchange liquidity.
He acknowledged the challenges faced by the business community in the financial markets and assured them of additional foreign exchange liquidity to restore market confidence.
One of such has been the injection of around $250 million to the trio of Citibank, Standard Chartered, and Stanbic IBTC.
A look at the black market showed that the domestic currency also appreciated against the US Dollar this afternoon to sell at N950/$1 compared with the previous day’s value of N1,140/$1, indicating an improvement by N150.
Dipo Olowookere