Naira Gains N11.80 Against U.S. Dollar in April
The Nigerian naira gained about N11.80 kobo per US dollar (USD) at the official window in April, closing at N1374.9431, according to daily FX publications released by the Apex Bank.
The local currency opened the month at N1386.7156 per dollar, according to Central Bank of Nigeria (CBN) FX data, reflecting the authority’s sustained intervention at the official window.
At the parallel market, the local currency was quoted at N1385 per dollar at the last trading session in April, recording a gain of about N15 over the 30 days.
The spread against the black market rate remains low, with transparency and efficiency of the exchange market considerably improved.
The black market’s importance has greatly diminished – the spread between the official and unofficial rates is now estimated to be only 2-5%- with the daily turnover in the Nigerian Foreign Exchange Market (NFEM) up sharply.
Ebury said in a report that daily turnover in the Nigerian forex market exceeded $500 million. “While still relatively illiquid compared to some of its peers (South Africa’s spot FX market trades between $4 and $6 billion daily), this marks a dramatic improvement over 2016 levels, with $60 million.
In contrast to market expectations that the global energy crisis will boost Nigeria’s fiscal performance, the Central Bank has seen successive FX outflows.
Oil topped $120 per barrel last month, from $65 before the US-Iran war started in February. Rising oil prices have often coincided with a strengthening of the US dollar, potentially intensifying inflation dynamics.
The surging and persistent FX payments have reduced Nigeria’s gross external reserves to $48.367 billion as of April 29, from a peak of $50 billion. CBN Reduces Interest Rate on 364-Day Treasury Bills