Why is Dollar Falling Against Naira Today in Nigeria?

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Why is Dollar Falling Against Naira? This is one of the questions many Nigerians are asking right now after the sudden dollar depreciation against Naira.

In recent news, the value of the Nigerian Naira has seen a significant rise against the US Dollar, with the exchange rate now around N1000 per dollar. This marks an impressive appreciation of N280 or 5.47% compared to the previous day’s rate of N1,280.

So, why is the dollar falling against the Naira today? Let’s delve into the factors at play.

CBN Clears Forex Debt Backlog

One of the primary reasons for this shift in exchange rates is the recent move by the Central Bank of Nigeria (CBN) to clear some of its foreign exchange (FX) backlog. According to sources close to the matter, the CBN has started settling its FX obligations with specific banks, including Citibank, Stanbic IBTC, and Standard Chartered, among others.

Aminu Gwadabe, the President of the Association of Bureaux De Change Operators of Nigeria, affirmed that the dollar closed trading at N1,120 on the mentioned day and attributed this to the CBN’s initiative to clear its backlogs.

This move has been welcomed by the foreign exchange market, as it signals a positive development in the country’s economic landscape.

Naira’s Recovery

Currency traders, also known as Bureaux De Change operators, have noted the Naira’s quick recovery. It went from trading at N1,170 per dollar in the morning to closing at N1,120 per dollar, as observed by various traders. This recovery demonstrates the Naira’s resilience and positive response to the CBN’s actions.

The Naira’s appreciation is not limited to the unofficial market. At the official market, the Naira also gained ground, appreciating by 0.76% to close at N793.28 per dollar on the same day.

Federal Government’s Efforts

The Federal Government of Nigeria has also played a role in stabilizing the Naira’s value. They announced that they are expecting $10 billion to clear forex backlogs and stabilize the Naira.

This announcement was made by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during the 29th Nigerian Economic Summit.

Edun highlighted various sources of foreign exchange, including increased production, reduced expenditure, and discussions with sovereign wealth funds. These efforts provide hope for a more stable and robust Naira in the near future.

Conclusion

In conclusion, the recent Dollar Falling Against Naira can be attributed to the Central Bank of Nigeria’s initiative to clear its FX backlog and the government’s efforts to stabilize the currency.

These positive developments have had a noticeable impact on the foreign exchange market and hold promise for the Naira’s continued recovery.

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About the Author: Femi Olawole

Femi Olawole is a seasoned blogger with interest on providing helpful Contents on online loan apps, Tech and Business.

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