The Nigerian currency, the Naira, is experiencing a resurgence against the dollar, as the federal government begins to clear backlogs.
The foreign exchange (forex) market witnessed a significant turnover of $2.23 billion in October. The naira also rebounded on the parallel and official markets, as CBN reportedly supplied banks with $6.7 billion to clear backlogs.
The volume of dollars traded in the Nigerian Foreign Exchange Market (NAFEM) window increased by 23.8% monthly to $2.23 billion in October 2023 from $1.8 billion in September, showing an increase in Forex inflows. FMDQ data shows that the naira fell to N815.23 per dollar in the Investors and Exporters (I&E) window at the end of October 2023, from N755.27 per dollar recorded on September 29, 2023.
The black market rate closed at N1, 170 per dollar at the end of October 2023, from N1, 000 per dollar on September 29, 2023. The disparity between the official and parallel market rates widened to N354.68 per dollar on October 31, 2023, from N244.73 per dollar recorded on September 29, 2023.
However, the Naira has experienced a resurgence against the dollar in the first two days of November as the Federal Government moves to clear Forex backlogs blamed for the crash of the naira.
Analysts say the foreign exchange market is nearing convergence in line with the plans of the Nigerian government.
