Naira Appreciates by 10% to Close at N1,382/$ On Thursday

The value of the naira was reported to rise significantly on Thursday to close at N1,382.85 against the dollar, from how it previously closed on Wednesday for N1,536.83 after the Central Bank of Nigeria (CBN) reported that it had cleared all valid foreign exchange backlogs on Wednesday. This action will increase the inflow of the Nigerian Autonomous Foreign Exchange Market (NAFEM).

This rise was 10% higher than Wednesday's local currency's value. Also, foreign exchange inflow at the market rose to $288.47 million.

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On Wednesday, the CBN stated that it had cleared the outstanding debt on forex backlogs inherited from the previous administration under Godwin Emefiele. The Acting Director of Corporate Communications, Mrs Hakama Sidi Ali, stated this development in her latest release.

She also noted that the CBN had just finished paying out $1.5 billion to settle debts to bank customers, which basically cleared the remaining amount of the foreign exchange backlog. She revealed that a team of independent auditors from Deloitte Consulting had carefully reviewed these transactions to ensure that only legitimate claims were honoured. However, Ali said that any invalid transactions were immediately forwarded to the appropriate authorities so they could be investigated further.

In a recent meeting, the CBN governor, Cardoso, declared: "We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy.

"It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country's ability to meet its obligations is now totally behind us," he added.

Mr Cardoso highlighted the importance of clearing the FX backlog to build trust and credibility in the Nigerian economy.

It was also revealed that Nigeria's external reserves have been steadily increasing over the past month, which eased the pressure on the naira/dollar exchange rate.

According to the CBN's latest statistics, as of March 12, 2024, foreign currency reserves stood at $34.37 billion, up 3.62% from $33.17 billion at the start of February 2024.

In addition, the CBN announced a notable increase in remittances from the diaspora, which jumped from $300 million in January to $1.3 billion in February, a 433% increase.

Back Story
On Wednesday, the naira showed strength at the official market, quoting N1,560.75/$, and this development has been attributed to the many reforms of the Central Bank of Nigeria (CBN).

At the close of trading at the foreign exchange market on Tuesday, the naira increased by 0.79% as the dollar was quoted at N1,560.57, which was a little bit better than how it was quoted on Monday for N1,572.86 at the Nigerian Autonomous Foreign Exchange Market (NAFEM)

According to the report, the intraday high closed at N1,626.50 per dollar on the spot on Tuesday, while the intraday low closed at N1,415/$1 on the same day.