Naira Rebounds to N1,275/$1 at Parallel Market Amid Senate’s Call for Currency Stability
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The Nigerian naira has displayed signs of resilience against the United States dollar, strengthening by N125 to reach N1,275/$1 over the weekend. This marks a significant 9.8% increase compared to its previous rate of N1,400/$1 at the close of trading on Friday.
Amidst this currency fluctuation, the Senate’s Committee on Finance has urged collaborative efforts from all stakeholders to restore and maintain the stability of the naira. Expressing concerns over the currency’s instability and continuous depreciation, the Senate emphasizes the urgent need for concerted action.
Currency traders at the bustling Wuse Zone 4 market attribute the market’s trading uncertainty as a primary factor contributing to exchange rate fluctuations. They suggest that the government must take decisive steps to either strengthen or devalue the currency for market stability.
However, traders refrained from providing a selling rate for Sunday, citing the absence of trading activity.
Malam Yahu Ibrahim, a trader, highlights the risks faced by operators due to the naira’s instability and calls for decisive government action to address the situation. Another trader, Abubakar Taura, expresses caution in trading activities, citing concerns over potential drastic measures by the Central Bank of Nigeria (CBN) to stabilize the naira.
The naira’s recovery coincides with plans by the Association of Bureaux De Change Operators of Nigeria (ABCON) to unify the retail end of the foreign currency market. ABCON President, Aminu Gwadabe, outlines initiatives aimed at tackling volatility and enhancing regulatory compliance within the market segment.
Despite this marginal gain, the naira had experienced a 26.2% loss over two weeks, reflecting the currency’s recent volatility. Last Monday, the CBN approved the allocation of $15.83 million to 1,583 BDC operators to boost liquidity in the unofficial market.
Data from FMDQ Securities Exchange indicates a continued downward trend of the naira against the dollar at the official foreign exchange window, closing at N1,339/$ on Friday. This represents a 2.24% depreciation compared to the previous day’s rate, underscoring a week of continuous depreciation in the official market.
As the Senate responds to the currency challenges, stakeholders await further developments and measures to stabilize the naira amidst ongoing market fluctuations.
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