Victor EzejaThe Nigerian naira recorded mixed sentiments of gains and losses against the Dollar at the foreign exchange market last week.
At the official market window, the Central Bank of Nigeria (CBN) data on Foreign Exchange showed that the naira opened the week on a positive note with a slight appreciation at ₦1,598.68 on Monday, 19 May.
Join our WhatsApp ChannelIt further strengthened to ₦1,590.45 on Tuesday, gaining ₦8.23; ₦1,584.49 (₦5.96 gain) on Wednesday. After a marginal depreciation on Thursday to ₦1,584.95, the local currency strengthened to ₦1,580.44 on Friday, 23 May.
At the parallel market, it was a similar story of gain and losses. After dropping to around ₦1,635 earlier in the week, the Nigerian legal tender ended the week on a positive note, appreciating to ₦1,625 per dollar.
Despite the mixed performance of the local currency in the past week, analysts believe that it is relatively stable. This is as the CBN continues to roll out measures to ensure stability.
The apex bank has continued to make targeted intervention in the foreign exchange market to boost liquidity. It recently sold $190.40 million to the market to keep the exchange rate at the range it currently trades and maintain stability.
In its weekly report published on Friday, Cordros, a Lagos-based consultancy firm, said the naira is expected to remain stable in the short term but may not likely record substantial appreciation.
“The naira is likely to stay stable in the short term, as global pressure remains contained amid easing trade tensions,” the analyst said.
READ ALSO: Naira Appreciates, Ends Week Positive Across Official, Black Markets
“However, any substantial appreciation appears unlikely, with FX liquidity still constrained by subdued foreign portfolio inflows amid persistent global uncertainty,” it added.
Speaking at a press briefing after the 300th Monetary Policy Committee (MPC) meeting on Tuesday, the CBN governor Dr Olayemi Cardoso, said the naira is currently a stable, reliable, and more competitive payment system for trade across the West Africa region.
He added that if the current trend of the currency is sustained, it would encourage more exports.
According to Cardoso, the CBN would intensify its reforms to guarantee that the currency remains stable despite international tensions and that prices stay stable in order to control inflation expectations.
On naira stability, Heirs Holdings chairman, Mr Tony Elumelu, said though naira stability does not mean significant decrease in rate of exchange with hard currencies such as dollars, it however, helps investors and other business leaders in making effective planning at least in the mid-term.
Victor Ezeja is a passionate journalist with seven years of experience writing on economy, politics and energy. He holds a Master's degree in Mass Communication.
