- The Nigerian currency has appreciated against the British pound sterling and the euro in the official foreign exchange markets
- Data from the CBN shows that the naira appreciated by 5% against the British pound sterling and by 2% against the euro
- There is optimism that the naira will perform better following the inflow of forex from the NNPC and the Afrixembank crude oil deal
The value of the Nigerian currency, the naira, closed strong in the last trading session against the euro and the British pound sterling in the Nigerian Autonomous Foreign Exchange Market (NAFEM).
In an update released on Monday, June 10, the Central Bank of Nigeria revealed that the naira exchange rate against the pound stood at N1842.44/£1 on Friday, June 7, 2024.
Friday’s exchange rate represents a 3.02% improvement compared to the N1,899.9 rate on Thursday, June 8.
Photo credit: Pius Utomi Ekpei
Source: Getty Images
Also, CBN said that the naira gained against the euro, settling at N1,567.67 on Friday, compared to the previous rate of N1,617.61/€1 on Thursday.
This indicates that in 24 hours, the naira improved against the euro by N49.94 or 3.08%.
CBN gets support to defend the naira
The naira improvement can be attributed to the positivity around the foreign market following improved liquidity after the federal government received an additional $925 million under the syndicated $3.3 billion crude oil-backed prepayment facility sponsored by the Nigerian National Petroleum Company Limited (NNPC).
The loan will, among other things, stabilise the forex market via the CBN and provide funding for NNPC.
The federal government also remains hopeful of attracting more foreign exchange (FX) inflows into the country.
In a recent report, Razia Khan, managing director and chief economist for Africa and Middle East Global Research at Standard Chartered Bank, discussed the importance of dollar liquidity and its role in stabilising the naira.
He said:
“For investors – and Nigeria’s ability to attract further FX-stabilising inflows into local currency markets, this matters a great deal.”
FG addresses naira to dollar exchange rate
Legit.ng earlier reported that Ben Akabueze, the director-general of the budget office, said the naira’s value would strengthen in the foreign exchange market in 2024.
Akabueze said this would be possible as the country expects an increase in dollar supply.
He noted that the Tinubu-led government expects the reforms to start yielding results in 2024, which is why it maintains a positive stance on the exchange rate
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
Source: Legit.ng
