At the official investor and exporter counter on Monday, the naira rose 27.16% to close at 864.29 naira to the dollar.
This comes as the dollar’s daily volume jumped 86.83 percent from $70.9 million last Friday to $132.46 million at the close of trading. According to data from the FMDQ Stock Exchange, the rise in the naira means an increase of 234.76 Naira from the all-time low of 1099.05 Naira/$ that closed last Friday.
Trading on Monday started at N867/$ and reached a high of N1185.10/$ and a low of N720/$. The daily dollar volume reached $132.46 million and finally settled at N864.29/$.
Monday’s interest rate marks a slight recovery for the country’s currency, which has been volatile since Nigeria’s central bank lifted its interest rate cap.
Since the apex bank moved to standardize rates, the country’s foreign exchange reserves have fallen by about $1.6 billion to $32.97 billion. This decline in foreign exchange reserves is said to be the cause of the collapse of the naira.
Recently, the Economist Intelligence Unit stated that Nigeria does not have enough exchange rate arsenal to defend a unified exchange rate policy.
“In Nigeria, unsupportive monetary policy suggests that the naira remains under pressure, while the central bank has no ability to adequately supply the market and They lack the firepower to clear order backlogs and the naira will continue to suffer.” Foreign investors were upset. Continuing high inflation and parallel market spreads will lead to an unstable exchange rate regime and periodic devaluations. ”
Recently, CBN Governor Olayemi Cardoso discussed Nigeria’s attempts to stabilize the exchange rate. He said the bank plans to announce new exchange guidelines in hopes of saving the market.
He said: “Clear, transparent and harmonized rules governing market operations are essential to ensure the proper functioning of domestic and foreign exchange markets.” New foreign exchange guidelines and legislation will be developed and extensive consultation will be held with banks and foreign exchange market operators before introducing new requirements. ”
