The Nigerian currency, the naira, has been stable against the dollar relative to other global currenciesThe local currency traded flatly on the day of trading in the year, beginning the year with positive expectationsMeanwhile, the Chinese Yuan, the Mexican Peso and the South African rand fell against the US dollar’s surging strength
Henzodaily.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade
The Nigerian currency has remained relatively strong despite the dollar’s surging strength to a two-year high against major currencies on Monday, January 13, 2025.
The naira has remained stable against the US greenback compared to peer currencies.
The naira opened 2025 strong against other currencies relative to the dollar’s dominance.
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The naira began 2025 strongly against the dollar
The naira flatly ended the first week of trading in 2025 as pressure eased on the FX market.
Data from the Central Bank of Nigeria (CBN) shows that the naira began 2025 at N1,538,50 per dollar on January 2, 2025. By the week’s end, the naira slightly fell to N1,544.40 against the dollar, showing a 0.4% marginal decline.
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According to data from the FMDQ Exchange, the naira closed Monday’s trading at N1,550 per dollar, losing 0.35% relative to the N1,544.50 it quoted at the Nigeria Foreign Exchange Market (NFEM).
The data shows that authorised dealers quoted the dollar at a high of N1,550 and a low of N1,548 per dollar.
The naira remained steady at N1,655 and N1,665 in the parallel market on Monday, January 13, 2025, relative to the performance of other emerging market currencies struggling against the dollar’s dominance.
Naira and dollar vs other currencies
According to reports, the Mexican Peso traded at 20.80 per dollar on Monday against the 20.419 between January 1 and 8, 2025.
Similarly, the South African rand traded at 19.09 per on Monday, January 13, 2025, from 18.93 on January 10, 2025 and 18.90 on January 9, 2025.
Traders quoted the Chinese Yuan at 7.33 on Monday, January 13, 2025, and January 2 and 3, 2025, respectively.
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Naira remains steady in official market, gains in parallel window as Nigeria’s FX reserves rise
Meanwhile, the US dollar has continued to surge, driven by hopes of robust economic growth in the US compared to its peers globally.
US dollar trades strong amid inflows into Nigeria
Reuters reported that the dollar hit its highest level in two years on Thursday, January 2, 2025. The performance builds on last year’s gains caused by the Federal Reserve’s monetary policy stance and broader economic trends.
The US Federal Reserve has indicated its plan to be cautious about cutting interest rates due to inflation’s stubborn stance above two per cent.
Inflows, EFEMS’ impact
Experts said the inflows of Nigerians visiting during the festive seasons and CBN’s increased FX supply have helped the naira’s recovery.
The local currency remained stable because of the Nigerians’ inflow in the diaspora returning for the Christmas season, proceeds from a recent Eurobond issuance, and enhanced market transparency introduced by the CBN.
The naira’s stability has been attributed to CBN’s implementation of the EFEMS, which has boosted transparency and efficiency in forex trading.
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Data from the apex bank shows that Nigeria’s external reserves stood at $40.75 billion as of January 10, 2025.
CBN introduces changes
In a move aimed at tightening FX management, the CBN announced that it would no longer approve requests for the extension of repatriation of export proceeds by authorised dealers on behalf of their customers.
The decision became effective immediately and was disclosed in a circular by the CBN.
The bank introduced specialised accounts, the Non-Resident Nigerian Ordinary Account (NRNOA) and the Non-Resident Nigerian Investment Account (NRNIA), in a strategic move to enhance liquidity and increase diaspora contributions to Nigeria’s economic growth.
Naira gains over N147 against the US dollar
Henzodaily.ng earlier reported that CBN’s newly introduced EFEMS has increased naira demand in the parallel market.
The new system by CBN led currency speculators and illegal market operators to resort to other sources for FX.
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Traders, currency dealers quote dollar at new rate as naira continues losing streak
Apart from illegal traders, legitimate buyers who cannot meet the new platform’s requirements have seemingly also opted for the parallel market, aiding the value of the local currency.
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Source: Henzodaily.ng