Naira strengthens at official market as exchange rate unification gets closer

The naira started Wednesday’s trading day 6.2 percent lower against the dollar at N385 on the official market, Reuters is reporting.

The currency closed trading at N361/$, the same point it closed at on Tuesday.

Black market traders told TheCable on Wednesday that the currency has been fluctuating on the market, closing at N452.

The naira exchanged at N448 to the dollar on the black market on Tuesday and traders told TheCable that the highest point it has reached in recent times was N465/$.

The fluctuation could be connected to recent actions taken by the federal government and the Central Bank of Nigeria (CBN) targeted at exchange rate convergence.

In a letter to the International Monetary Fund for the $3.4 billion loan, the federal government said it would work towards “full exchange rate unification and greater exchange rate flexibility” to help preserve foreign exchange reserves and avoid economic dislocation.

The economic sustainability committee led by Vice President Yemi Osinbajo also recommended a unification of exchange rates to maximise naira returns to the federation accounts allocation committee from foreign exchange inflows.

The committee also recommended that oil companies and oil service companies sell foreign exchange to the CBN rather than sell to the Nigerian National Petroleum Corporation (NNPC).

However, Godwin Emefiele, the CBN governor, has always assured of the apex bank’s capability to meet the forex demands of manufacturers and investors.

On June 5, Nigeria’s foreign reserves crossed the $36 billion mark for the first time since March 17.

As at March 16, the reserves stood at $36.3 billion.