The Nigerian currency, Naira, gained further on Thursday as it exchanged at N461 to the United States dollar at the Investors and Exporters window.
The rate represented an increase of 0.05 per cent, compared to the N461.25 for which it exchanged to the dollar on Wednesday.
The open indicative rate closed at N461.25 to the dollar on Thursday.
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An exchange rate of N462.11 to the dollar was the highest rate recorded within the day’s trading before it settled at N461.
The Naira sold for as low as N446 to the dollar within the day’s trading.
A total of 82.83 million dollars was traded at the official Investors and Exporters window.
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The Nigerian Naira has been recording a marginal gain against the United States Dollar in the past few weeks. This is being attributed to the Central Bank of Nigeria’s (CBN) decision to supply forex to the interbank market.
In June, the CBN intervened in the foreign exchange market and began to inject the local currency through its various wholesale interventions. As a result of the interventions, the Nigerian Naira was able to strengthen from N487/$ to N460/$ in the parallel market.
The CBN has also taken steps to reduce the number of items eligible for forex allocations and to increase liquidity in the market through its commodity-backed loans. The reduction of items eligible for forex allocations has effectively helped to shore up the local currency against the US dollar.
The CBN’s decision to limit the number of import items eligible for forex allocation has been applauded by many, as it has effectively reduced the demand for dollars and stabilized the foreign exchange market.
Overall, the marginal gain in the Naira against the US dollar is a positive development and is indicative of the improving health of the Nigerian economy. It is also an encouraging sign for investors, who are now less likely to want to store their money in US dollars and, instead, are opting for the local currency.
With the continued intervention by the CBN, it is expected that the Naira will continue to gain against the US dollar in the coming weeks.
