The month of March 2024 was marked by a significant change in the exchange rate of the Nigerian Naira against the US dollar. According to data compiled by the FMDQ Securities Exchange, the naira closed trading at 1,410 naira per dollar at the parallel market and 1,492 naira at the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on Wednesday.
This appreciation of the naira on the official market represents an increase of 4.55% compared to the 1,560 naira per dollar recorded the day before – Tuesday at NAFEM, and an increase of 13.5%, or 190 naira on the parallel market.
The increased supply of dollars has helped reduce pressure on the naira/dollar exchange rate, while Nigeria’s external reserves have also recorded significant growth over the past month.
According to data from the Central Bank of Nigeria, foreign exchange reserves increased by 3.62% from $33.17 billion recorded in February 2024 to $34.37 billion as of March 12, 2024.
This appreciation of the local currency was attributed to the selling of dollar stocks by speculators following measures taken by the Central Bank of Nigeria to regulate foreign exchange activities, as well as lower demand from potential buyers.
Five months after coming to power, President Bola Tinubu pledged to eliminate the foreign exchange arrears he inherited.
In an interview on Arise Television last month, Central Bank Governor Olayemi Cardoso said he found about $7 billion in foreign exchange arrears when he took office.
In a statement by the Central Bank’s Acting Director of Corporate Communications, Hakama Sidi Ali, it was recently announced that the Central Bank had cleared $1.5 billion in foreign exchange arrears, confirming the promise of the Governor of the Central Bank to settle all inherited foreign exchange arrears.