2024: First positive movement for Naira against US dollar

At the official market on Thursday, January 4, 2024, the value of the Nigerian Naira increased against the US dollar, marking the first gain of the year 2024.

It was anticipated by market observers that the local currency would benefit from a $2.25 billion infusion from the African Export-Import Bank (Afreximbank) to alleviate the nation’s foreign exchange crisis.

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Since the FX market was unified by the Central Bank of Nigeria (CBN) on June 14, 2023, there has been a severe liquidity deficit that the facility was designed to alleviate.

According to figures from the NAFEM, where forex is officially exchanged, the local currency increased by 13.51% to close at N895.23 to a dollar at the close of business.

This is a 13.51% increase in the local currency, or N139.89, over the N1035.12 closing value from the previous day.

There was a broad spread of N567/$1, with the intraday high being N1268/$1 and the intraday low being N701/$1.

Data from the official NAFEM window indicates that at the end of trading, there was $68.49 million in forex turnover, which was 20.06% less than the day before.

The naira did, however, slightly weaken at the unofficial parallel FX market, where currency is sold. There, peer-to-peer traders quoted roughly N1240.26/$1, down 0.81% from the previous day’s closing rate.

Recently, Afreximbank provided Nigeria’s FG with $2.25 billion of the $3.3 billion foreign exchange (FX) support facility in order to alleviate the severe liquidity deficit in the FX market.

The parties involved, who also just inked a $150 million contract, achieved a significant financial cooperation milestone when they formally signed this crucial agreement on December 29, 2023.

In this tactical financial agreement, United Bank for Africa, which acts as the Local Arranger, and Afrexim Bank, in its capacity as the Mandated Lead Arranger, collaborate closely.

NNPC Limited, the primary financier, was successful in concluding the arrangement.

Guvnor and Sahara Energy are also included as important participants in the arrangement, emphasising the cooperation of several parties in the transaction.