Naira appreciates, gains against all foreign currencies in official and black market

Fresh data from FMDQ securities shows that the Nigerian currency recorded a strong performance in the official and unofficial exchange markets against all foreign currencies.

Wednesday’s closing rate represents a 6.6% or N75.40 appreciation compared to the previous day’s N1,148.14/$.

Naira also improved its value against the pound sterling and the euro in the official market.

CBN data shows that the naira ended the day with an appreciation of N298.92 to sell at N1,147.53/£1 compared with Tuesday’s closing value of N1,446.45/£1.

While against the Euro, it gained N14.62 to quote at N1,220.17/€1 versus N1,234.79/€1.

It was the same scenario for the naira in the unofficial market as it continued its strong performance.

Traders who spoke to Legit said the naira appreciated N50 to trade at N1,050/$1 compared with the preceding day’s rate of N1,100/$1.

Meanwhile, The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso has said that the apex bank is not defending the Naira with the nation’s foreign reserves.

Cardoso stated this against the backdrop of the recent decline in Nigeria’s foreign reserves corresponding with massive appreciation of the Naira in the foreign exchange market (forex).

There have been speculations that the apex bank pumped forex into the market to dwarf demand pressure and shore up the value of the local currency.

However, speaking at the on-going Spring Meetings of the IMF the World Bank, Cardoso said that his team at the apex bank has no intention to defend to the Naira.

He insisted that they are more focused on having a vibrant forex market so the naira can perform independently.

He explained that the decline in foreign reserves was not to defend the Naira but for settling other obligations.

His words, “Defending the Naira, from every indication is an elephant in some rooms. I will make this as clear as possible.

It is not our intention to defend the Naira.

Much as I have read in the recent few days some opinions about what has happened in terms of our reserves being drawn down, the CBN Defending the Naira, if you take your mind to our philosophy and policy, you will see it will be counter intuitive.

We want the Naira to perform independently as long as we have a vibrant forex market.

“Initially we needed to keep the BDCs going.

So, it is important for people to get forex for school fees, travels and the like.

“The shift you see in our reserve is not to defend the Naira but for things like settling obligations that fell due.

Mind you, that is the reason for keeping foreign reserves, in the first place.”

Cardoso also said that his team is cooperating with the fiscal authorities and that, “Ways and Means is no longer an issue.

He said, “Let me be upfront in saying that the monetary policy is only one side.

It is very clear to us that we need to have a very good handshake with the fiscal authorities.

“For instance, food inflation is not within the purview of the CBN. Ways and Means is now less an issue.”

The CBN boss said he decided to go the orthodox central banking route in order to build confidence in the Nigerian currency.