ON THE OFFICIAL MARKET, THE NAIRA RISES N872.59/$1 ON THE FIRST TRADING DAY FOLLOWING THE CHRISTMAS

On Wednesday, December 27, 2023, the first trading day following the Christmas break, the Naira appreciated versus the dollar at the official market, resulting in a 38.81% increase in forex turnover to $127.93 million.

End of business, the local currency gained 1.52% to settle at N872.59 to the US dollar, according to figures from the NAFEM, the official forex market.

· Comparing this to the N885.88 closed on Friday of last week, the local currency has increased by 1.52%, or N13.29.

· There was a broad spread of N495.65/$1, with the intraday high being N1235.65/$1 and the intraday low being N740/$1.

· Data from the official NAFEM window indicates that at the end of trading, there was $127.93 million in currency turnover, which was 38.81% higher than the day before.

On the other hand, the naira saw a slight dip at the illegal parallel forex market, where currency is sold. There, peer-to-peer traders quoted about N1197.60/$1, down 0.24% from close.

According to the Central Bank of Nigeria (CBN), 31 banks have received tranche payments from the CBN to settle outstanding foreign currency.

In order to handle the FX concerns, the apex bank had established FX frameworks.

What financial specialists are saying

In an exclusive interview, Mr. Olatunde Amolegbe, the managing director of Arthur Steven Asset Management Limited and the former president and chairman of the governing council of the Chartered Institute of Stockbrokers (CIS), stated market confidence is essential for a stable exchange rate.

· What attracts foreign investors to your country and encourages locals to maintain their investments here is confidence.

· The kind of instability will result from demand naturally exceeding supply in the absence of these dynamics.

· I think the decision to clear FX commitment backs will be positive for market confidence, but the desired in the medium term rather than in the short run.

· Although it's not a magic bullet, I believe that efforts to tools to restrict system liquidity could speculation.

In order to promote import substitution, he stated, “deliberate efforts need to intensify at effecting structural changes, security, better infrastructure, increased foreign direct investments, and encouraging local production.”

The naira is predicted to continue volatile due to persistent concerns by Bismarck Rewane, the managing director and CEO of Financial Derivatives Company Limited.

Due to the scarcity of dollars, speculative buying is probably going to continue as more and more traders short the naira and take long positions in the dollar.

The words foreign [currency] and exchange are combined to form the acronym forex (FX). The process of converting one currency into another for a variety of purposes—usually trade, tourism, or commerce—is known as foreign exchange. The Bank for International Settlements, a global bank that serves national central banks, stated in a 2022 triennial report that the daily global volume of FX trading hit $7.5 trillion in 2022.

The market is open five and a half days a week, 24 hours a day. The main financial hubs of Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich are the global hubs for currency trading, spanning nearly all time zones. This implies that after the U.S. trading day concludes, the currency market opens in Tokyo and Hong Kong.