The official NAFEM window witnessed the closure of the Naira-to-Dollar exchange rate at N1,300/$1 on Wednesday, March 27, 2024, marking its most robust performance in over eight weeks, as per data sourced from FMDQ, the official quoting platform for exchange rates. Concurrently, Nairametrics’ investigation revealed a strengthening in the exchange rate within the parallel market, with rates ranging between N1,250 and N1,300 for both cash transactions and inflow-related transfers.
Analysis of FMDQ data indicates that the exchange rate concluded at N1,300.43 on Wednesday, marking its strongest position since January 26, 2024, when it closed at N891.9/$1. Intraday fluctuations saw the highest quotes hitting approximately N1,460/$1, while the lowest point was marked at N1,200/$1, offering insights into potential future stability. Notably, the day’s total turnover reached $416 million, representing the highest forex volume recorded since February 6, when $465 million was transacted. Nairametrics’ assessment reveals a weekly turnover of about $946 million and a monthly turnover of approximately $3.7 billion, contrasting with February’s turnover of around $4.67 billion.
The strengthened Naira can be attributed to various monetary policies enacted by the Central Bank, notably elevated interest rates for OMO bills and Treasury bills, with the latest Treasury bills attracting an interest rate of 21.5%, accompanied by an allocation of over N1.5 trillion. Higher interest rates are commonly perceived as efforts to combat inflation while enticing dollar inflows. Additionally, the CBN has adjusted its forex policies, permitting market-driven exchange rates and resuming forex sales to BDCs, with reports indicating the sale of $10,000 to BDC operators at an exchange rate of N1,251/$1.
Moreover, the exchange rate utilized for customs import duties and cargo clearance has witnessed a fifth consecutive decrease in less than two weeks, declining from N1,612 per dollar on March 15 to the current rate of N1,405.46 per dollar.
