Naira Traded for N1,072 Against the Dollar at the Official Market on Wednesday

It has been reported that the naira noticed a significant shift against the United States dollar at the official market on Wednesday, following a slight depreciation on Tuesday.

The naira closed Wednesday's trading session at N1,072.74/$1, up from N1,148.14 on Tuesday, according to market data that was posted on the FMDQ website.

This represents N75.4 or 6.6% appreciation from N1,148.14, the domestic currency closed on Tuesday. The Naira closed at N1,072.74/$1 on Wednesday, reaching an intraday high of N981.04 and a low of N1,220.00 to the dollar.

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Meanwhile, the official market data showed that the naira recorded a foreign exchange turnover of $189.12 million on Wednesday.

On Wednesday, the CBN governor, Olayemi Cardoso, addressed questions regarding the value of the local currency and Nigeria's foreign reserves. He explained that the movement of the reserves is unrelated to the recent gains the Nigerian unit has made in the forex market. Cardoso gave his speech at the spring meetings of the ISB and World Bank in Washington.

He said the CBN had no intention of defending the Naira.

“It is not in our intention to defend the naira, and much as I have read in the recent few days, some opinions concerning what is happening with our reserves and the CBN defending the naira.

“If you think back to what our overall policy and philosophy has been here, you can see it’s counterintuitive. The shift you see in the reserve has nothing to do with defending the naira, and that’s certainly not our objective,” he said.

It was reported that the naira has recently appreciated greatly at the parallel, amidst CBN intervention and efforts to boost FX liquidity through sales of dollars to BDC operators at a designated rate.

The dollar traded in the same range as it did in the previous market segment on Wednesday, according to Bureau De Change operators in Abuja Zone 4.

Despite some progress this past week in the proactive measures taken by the CBN to stabilise the local currency, inflationary pressures remain high nationwide.

It was also reported on Sunday that the country's local currency (naira) increased against the US dollar, breaking through key resistance levels to trade below N1,000 in certain black market segments.

This performance corresponds with increased geopolitical tensions worldwide and aligns with Goldman Sachs's previous projections.

"The Naira's current bullish momentum is projected to persist, potentially pushing the exchange rate below N1000 per US dollar in the upcoming months," economists from the American investment bank Goldman Sachs commented.