In a significant turn of events, the Nigerian naira has appreciated against the United States dollar, trading below 1,000 naira for the first time in 44 days in all markets, including the black market. On Thursday, the naira was trading at N995 against the US dollar, marking an appreciation of N118 in a matter of hours.
This substantial increase is largely attributed to the Central Bank of Nigeria’s (CBN) “Clearance of Expired Foreign Exchange Futures by CBN” initiative which cleared arrears on foreign exchange obligations of international entities such as Citi Bank on Wednesday. This initiative also extends to commercial banks and airlines, as part of a broader effort to stabilize the country’s currency.
In addition to the CBN initiative, Bureau de Change traders under ABCON’s “No More N1k” initiative are also contributing to stabilizing the Naira in the black market.
Further boosting expectations about the country’s financial stability is Finance Minister Wale Edun’s announcement of an upcoming foreign exchange inflow of $10 billion aimed at mitigating the current currency crisis. This projected entry is expected to catalyze further gains for the Naira.
In support of this positive outlook, JP Morgan predicts an exchange rate of 850 naira per dollar by the end of the year. Similarly, according to Legit.ng, the federal government expects an exchange rate of N650 to N750 by December 2023. As such, the dollar is now trading below N1000 in the Peer to Peer (P2P) segment used by fintech applications and cryptocurrency platforms. , which marks a notable change in the country’s financial landscape.
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