Naira To Dollar: Nigerian Currency Appreciates At Official Window

The Nigerian currency, the Naira, experienced a 0.16 per cent increase, rising to ₦1530.52/$ from ₦1532.93 per Dollar during the previous trading session on the Nigerian Foreign Exchange Market, as trading concluded on Wednesday.

According to data from the Central Bank of Nigeria (CBN), the naira reached a peak of ₦1545 per dollar and a low of ₦1500/$, which was below Tuesday’s figures.

In the parallel market, CardinalStone Research reported that the naira remained steady at ₦1,585.00/$, thereby increasing the disparity for speculative traders.

Analysts noted that the difference between the official and parallel market rates has decreased to approximately 3.07 per cent, down from 3.40 per cent at the start of the week.

Despite a slight depreciation of the naira, analysts believe that the market is beginning to stabilize, attributed to structural reforms and a rise in foreign exchange inflows.

Meanwhile, there is much anxiety about a possible fuel price hike as the Dangote Petroleum Refinery temporarily ceased selling petroleum products in naira.

This development comes as the naira-for-crude negotiations between the $20 billion Lekki-based facility and the Nigerian National Petroleum Company Limited (NNPCL) have failed.

Naijaonpoint reports that following the announcement of this suspension on Wednesday, the cost of loading petrol at private depots in Lagos surged to ₦900 per litre, up from less than ₦850 per litre before the announcement.

Industry experts and oil marketers have warned that this move could heighten pressure on the foreign exchange market, as dealers would now need large amounts of U.S. dollars to purchase petroleum products.

Multiple industry sources familiar with the issue cited the extensive forward sales of crude oil by NNPCL as a key factor behind the failure of the naira-for-crude talks.

According to The PUNCH, these sources pointed out that NNPCL had used large volumes of unproduced crude oil to secure loans from international financial institutions, leaving it with insufficient crude to supply the domestic market.

In a statement issued on Wednesday, the Dangote Group explained that the suspension of sales in naira was temporary.