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Naira Gains Ground Against Dollar Amidst Presidential Warning to Speculators

In a remarkable turn of events, the Nigerian naira continued its upward trajectory against the United States dollar on Thursday, surging by N18 to settle at 1,382/$ at the official market. This surge follows a stern warning from the Presidency to currency speculators, cautioning against undermining the national currency.

The naira’s upward climb marks a consecutive day of gains, building on its momentum from Wednesday, where it closed at N1,400/dollar on the black market. Behind this surge lies increased dollar supply at the Nigerian Autonomous Foreign Exchange Market, as evidenced by data from the FMDQ Securities Exchange Limited.

Thursday’s trading action saw the naira hit an intraday high of N1,598 per dollar, a significant strengthening from the previous day’s close at N1,620. Similarly, the intraday low saw improvement, reaching N1,300/$, a stark contrast to the N1,350/$1 recorded previously.

Fueling this surge in the naira’s value is the increased dollar supply by FX market players, which soared to $288.47 million, marking a notable 7.46 percent rise from the previous day’s $268.29 million.

In recent weeks, the naira has clawed back a staggering N500 against the dollar from its record low earlier this year, buoyed by the Central Bank of Nigeria’s efforts to instill confidence in the FX market. Notably, the CBN’s successful resolution of all valid foreign exchange backlogs, totaling $7 billion, underscores its commitment to stabilizing the currency.

Governor Olayemi Cardoso’s pledge to address inherited claims and settle obligations to bank customers has been fulfilled, with $1.5 billion disbursed to clear the remaining balance of the FX backlog. This move not only enhances credibility but also instills confidence in the Nigerian economy.

Furthermore, Nigeria’s external reserves have witnessed sustained growth, climbing by 3.62 percent to $34.37 billion as of March 12, 2024. The surge in Diaspora remittances, reaching $1.3 billion in February, compared to $300 million in January, further bolsters the naira’s resilience.

In light of these developments, the Special Adviser on Information and Strategy, Bayo Onanuga, has issued a stark warning to currency traders, urging them to sell off their dollar holdings promptly to avoid potential losses. With the naira poised for further appreciation, currency speculators are advised to tread cautiously in the evolving FX landscape.

As the naira continues its upward trajectory, propelled by concerted efforts to curb speculation and bolster reserves, Nigeria’s economic outlook appears increasingly promising. Stay tuned as Findwhosabi News navigates the dynamic terrain of currency fluctuations and economic resilience.

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