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The Nigerian naira demonstrated limited strength during the final trading session of the week, strengthening to below N1600 amidst a fluctuating dollar index in global markets.
On the NAFEX market, the domestic currency experienced a marginal increase of 0.01%, moving from N1,589.61/$ to settle at N1,589.5/$.
Despite the ongoing efforts of the Central Bank of Nigeria (CBN) to stabilize the market, the naira's modest gain was achieved.
The local currency remains close to its lowest point in four months, with the CBN implementing various measures to manage the exchange rate and liquidity.
The recent fluctuations in the dollar index have intensified pressure on global currencies, including the naira, as the U.S. dollar encounters instability, leading to increased volatility and market uncertainty for emerging market currencies.
CBN's attempt to stabilize the Nigerian FX market despite its hawkish stance and a 50 basis point increase in interest rates for the 12th consecutive meeting earlier this week has not significantly impacted the naira's position near its four-month low.
The apex bank increased interest rates to 26.75% on Tuesday and has been selling foreign currency at record levels this year to enhance FX liquidity.
In a recent effort to stabilize the foreign exchange market following the naira's depreciation, the Nigerian Central Bank allocated $148 million to 29 authorized dealers.
Transactions took place between an exchange rate of N1,470.00/$1 and N1,510.00/$1 on Monday, July 22, and Tuesday, July 23, 2024, as stated on the Apex Bank’s website on Friday.
This allocation occurred two weeks after the CBN sold $122.67 million to 46 authorized parties to reduce volatility and increase liquidity in the nation’s stable markets. The CBN also expanded its “asymmet
