The Nigerian naira strengthened against the American dollar on Monday in both the official and parallel foreign exchange markets, signalling a favourable start to the week.
According to CBN data, Naira rose N5.16 from Friday’s rate of N1,457.95/$.
This posted a 0.35 per cent increase, maintaining the upward trend from the past week.
The Association of Bureau De Change Operators of Nigeria (ABCON) commended the Naira for its month-long strengthening in both official and unofficial markets.
ABCON President Dr. Aminu Gwadabe told the News Agency of Nigeria (NAN) in Lagos that different factors contributed to the gains. Nigeria was taken off the Financial Action Task Force’s (FATF) “grey list,” and its oil earnings, foreign reserves, and diaspora remittances all increased.
Gwadabe praised the nation for being eliminated and noted that the Naira had gained N10 against the dollar at the parallel market.
The greenback declined on Tuesday ahead of a series of central bank meetings expected to lead to a rate cut in the United States. Meanwhile, investors watched President Donald Trump’s tour of Asia cautiously in anticipation of a trade agreement with China. The value of the yen increased by more than 0.6% to 152.
The U.S dollar index, which compares the haven currency to six other currencies, eased 0.19 percent to 98.58 after falling 0.15 percent in the previous session. Markets will closely watch for any signs that the Fed is preparing to end its quantitative tightening program, as a rate cut is already expected.
The Fed and Chair Jerome Powell’s ability to clarify future rate moves is important, especially as the US government shutdown continues, depriving decision-makers of economic data. Traders project another rate cut in December.
The Fed is expected to cut interest rates by an additional quarter point at its October meeting on Wednesday, bringing the benchmark rate to 3.75-4 percent.
According to the CME FedWatch tool, markets currently assign a nearly 97 percent chance of a quarter percentage point rate reduction at the October meeting. Fed officials are debating the impact of the government shutdown.
Negotiations on trade issues such as export restrictions, fentanyl trafficking, agricultural trade, and shipping levies have led to a preliminary agreement between the US and China, according to US Treasury Secretary Scott Bessent on Sunday. This progress was made possible by ongoing talks.