The naira has demonstrated signs of strengthening against the United States dollar, appreciating by N125 to reach N1,275/$1 over the weekend.
The new rate represents a 9.8 per cent increase when compared to N1,400 to a dollar it traded at the close of trading activity on Friday.
This came as the Senate through its Committee on Finance called for concerted efforts by all relevant stakeholders to rescue and sustain its stability.
The senate said there was an urgent need for concerted efforts to tackle the instability and continuous depreciation of the Naira.
Currency traders at the popular Wuse Zone 4 market, who spoke with one of our correspondents on Sunday, blamed trading uncertainty of the market as reason for the fluctuations in the exchange rate.
They added that the government must either to choose to increase the currency value or devalue for market stability.
The operators did not provide a selling rate for Sunday, citing the absence of trading activity.
A trader, Malam Yahu Ibrahim, said operators were taking too much risk trading the naira due to its instability.
He said, “We take risks against ourselves every day because I don’t know how they are doing it, the naira is just swinging. “If the government wants to bring down the dollar totally, they should do it or if they want the naira to fall, they should do it and not allow it to fluctuate. It is killing businesses.”
“We are not even seeing the effect of the CBN dollar sale to BDCs, we are not seeing any effect.”
Another trader, Abubakar Taura, had in an earlier interview, expressed caution in trading activity, citing ongoing concerns that the CBN might take some drastic measures to stabilise the naira.
He noted that they couldn’t guarantee or predict what the rate would be on Monday (today) due to the volatile nature of the market.
The recovery in value coincides with plans by the Association of Bureaux De Change Operators of Nigeria to unify the retail end of the foreign currency market.
ABCON President, Aminu Gwadabe, said the move would tackle volatility and boost regulatory compliance within that segment of the market.
He said, “Part of our vision for a united retail-end forex market includes activating geo-mapping and automated BDCs physical office verification exercise using the Remote Gravity Physical verification apps. This will enable forex buyers to easily locate BDCs offices for effective and seamless transactions.”
Before the marginal gain, the naira had lost 26.2 per cent in two weeks when compared to N1,125 per dollar quoted on April 12, 2023, on the parallel market, popularly called the black market.
Last Monday, the Central Bank of Nigeria approved the allocation of $15.83m to 1,583 BDC operators to enhance liquidity in the unofficial market.
Meanwhile, data from FMDQ securities exchange showed that the naira continued its downward trend against the greenback at the official foreign exchange window, closing at N1,339/$ on Friday.
This represents a 2.24 per cent depreciation when compared to the N1,309/$ quoted on Thursday, highlighting a full week of depreciation at the official market.
Trading between willing buyers and sellers reached a total of $1bn at the Nigerian Autonomous Foreign Exchange Market.
Senate reacts
Meanwhile, worried by another round of naira depreciation at the forex market, the Senate through its Committee on Finance, called for concerted efforts by all relevant stakeholders to rescue and sustain its stability.
In a statement issued on Sunday, the Chairman of the Committee, Senator Sani Musa ( APC Niger East), said there was an urgent need for concerted efforts at tackling the instability and continuous depreciation of the Naira.
He said, “The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency.
The Nigerian economy is facing significant challenges, exacerbated by both internal and external factors.
“Despite efforts to stabilize and bolster economic growth, the numerous initiatives and bold but necessary steps and policy decisions taken by President Bola Tinubu, the persistent depreciation of the Naira against major foreign currencies has become a pressing concern.”
“The recent depreciation of the Naira underscores the need for proactive measures to safeguard the stability and resilience of our currency,” the Senate finance chairman lamented.
Senator Musa added, “The Senate Committee on Finance is closely monitoring the situation and is committed to working collaboratively with relevant stakeholders to implement effective policies and strategies.
“It is imperative that we address the root causes of Naira depreciation, including but not limited to fluctuations in global oil prices, fiscal deficits, and structural imbalances in the economy.
“The Senate Committee on Finance is exploring a range of policy options to mitigate the impact of Naira depreciation and foster economic stability.”
“This includes robust oversight of fiscal policies, engagement with key stakeholders, and the formulation of targeted interventions to support key sectors of the economy.
“It is also the hope of the committee that our economic managers will adhere strictly to the norms and standards set by this administration to ensure that we achieve the desired outcomes in taking Nigeria to its economic growth and prosperity.
“As we navigate these uncertain times, I urge all Nigerians to remain vigilant and resilient. Together, we can overcome the challenges facing our economy and chart a path towards prosperity for all”