Nigeria reports sudden and huge Naira gain — the most in six weeks

The naira rose big against the dollar on Tuesday, recording its best performance in six weeks, according to official figures.

The currency exchanged at N1,173.88 to a dollar on the official NAFEM window where it trades freely, an increase of 14.09% from the previous day.

FMDQ, which operates the platform, indicated that an earlier reporting of over N1,300 as the rate for Tuesday was wrong as the new figure shows “corrected.”

Elsewhere, the naira rallied but not by as much margin. At the parallel market, it exchanged at N1430 against N1445 the previous day, according to Naira Rates which tracks the prices on X, formerly Twitter.

The rise on the official market, the highest single-day increase since January, came as foreign exchange supply increased by 81.59% to $328.32 million, according to official data.

A Struggle

The Central Bank of Nigeria has struggled to stabilize the naira after lifting restrictions to allow a demand and supply to determine the exchange rate last year.

Since then, the naira plunged from N461 last in May 2023 to over N1800 in February, fuelling inflation and an unprecedented cost-of-living crisis.

The currency rose in April to N1,170, boosted by a series of central bank policies, including interest rate hikes, aimed at increasing dollar supply and curbing inflation.

The rapid rise gave hope for stability and potential price cuts on consumer goods.

By early May, it sank again to as low as N1550, becoming the world’s worst performing currency in the last month just a month after its performance as the world’s best currency, accord to Bloomberg data.

The reversal in fortunes dimmed hopes for price reduction. Inflation reached 32.2% in April, the highest since 1996.

The CBN has intensified efforts to attract more dollars, raising interest rate again last week and continuing its so-called open market operations, through which it borrows at high rates to attract foreign investors go after high naira returns for their dollars.