The Nigerian Foreign Exchange Market saw a notable increase in the value of the Naira on January 31, 2025, when it closed at N1,474.78 per dollar, up N63.72 from the previous year......CLICK HERE TO CONTINUE READING>>>.....CLICK HERE TO CONTINUE READING>>>
This 4.14 per cent increase, according to data from the Central Bank of Nigeria and the FMDQ Securities Exchange Limited, puts the local currency at its highest level in seven months. The last time it traded at this level was on June 11, 2024, when it was trading at N1,473.88/$ on the official market.
The CBN‘s actions, which have affected market dynamics and strengthened the currency, are in part responsible for the steep increase.
The dollar was quoted at the NFEM by authorised currency traders at up to N1,495.01/$ and as low as N1,447.50/$.
Exchange_naira_dollar (News Central TV)
Beginning January 2, 2025, at N1,538.50/$, the naira gradually appreciated throughout the month.
It dropped a little to N1,535.00 by January 3 and then fluctuated within a range that saw it reach its highest point of the month on January 16 at N1,560/$.
After the third week of January, though, the currency began a more steady increase, closing at N1,531/$ on January 24 and then rising to N1,520/$ on January 28.
It kept rising, reaching N1,474.78/$ on the final trading day of January after ending at N1,506/$ on January 29 and N1,493/$ on January 30.
The naira also strengthened against the US dollar in the parallel market on Friday, ending at N1,610/$, up N20 in a single day from N1,630/$ on Thursday.
The influence of recent monetary and foreign exchange policies implemented by the CBN to stabilise the currency and boost market confidence is seen in this most recent movement.
A major factor in this development has been the launch of the Electronic Foreign Exchange Matching System in December 2024.
The technology ensures openness and effective price discovery in the foreign currency market by enabling authorised dealers to place anonymous orders into a central limit order book through Bloomberg’s BMatch system.
This arrangement has made it simpler to control exchange rate swings by lowering market distortions and giving the CBN better supervisory powers.
The Nigeria Foreign Exchange Code, which was introduced on January 28, 2025, is another significant element contributing to the recent strengthening of the naira.
“The FX Code ushers in a new era of accountability and compliance. This framework is enforced; it is not only a list of suggestions,” CBN Governor Olayemi Cardoso said during the FX Code unveiling.
Cardoso noted that infractions will result in fines and administrative measures under the CBN Act 2007 and the BOFIA Act 2020.
Market participants’ ethical behaviour, governance, execution, information sharing, risk management, and settlement procedures are all governed by the FX Code.