Nigeria Nigerian Naira Gains Ground Against Dollar as Central Bank Tackles FX Backlog

The Nigerian naira has seen a significant uptick, reaching N1,120 against the US dollar, marking a 4.27% appreciation compared to its previous rate of N1,170. This positive shift comes in response to the Central Bank of Nigeria's (CBN) ongoing efforts to clear its backlog of foreign exchange (FX) transactions.

Currency traders, also known as Bureaux De Change operators, observed this positive trend, noting that the naira has rebounded well throughout the day, recovering from its morning rate of N1,170 per dollar to close at N1,120.

A trader named Awolu shared, "The dollar today is N1,040 if I want to sell. I buy at N1,030. The rate has dropped. This morning it was N1,170. It is still falling; it doesn’t have a bus stop yet."

Other traders echoed the sentiment, confirming the naira's improved position. Aminu Gwadabe, the President of the Association of Bureaux De Change Operators of Nigeria, attributed this positive trend to the CBN's efforts to clear its backlog and noted that the market was responding positively to this development.

In addition to the parallel market, the naira appreciated by 0.76% in the official market, closing at N793.28 to the dollar on Thursday, a notable improvement from N799.32/$ the previous day. The highest price recorded during the day's trading was N1,018.60/$, while the lowest price was N730.00/$.

The CBN's commitment to resolving the FX backlog is seen as a positive signal for the market. These efforts align with the Federal Government's goal to clear $10 billion in FX backlogs, as announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, indicating a potential boost to the naira's stability.