Currency Speculators and Hoarders Face Losses as Naira Strengthens in Official Markets, Holds Steady in Parallel Market

Foreign exchange speculators and hoarders are facing significant losses due to the sustained appreciation of the Naira against the United States dollar over the past five days. Both the parallel and official markets witnessed a consistent uptrend in the value of the Naira throughout the week.

Aboki FX reported that the Naira maintained its stability and experienced a marginal appreciation against the US dollar. At the beginning of the week, the US dollar was sold for N1,132 at the parallel market, but it appreciated to N1,125 by Tuesday and remained steady at that rate on Wednesday, Thursday, and Friday.

The Naira also strengthened against the US dollar at the Nigerian Autonomous Foreign Exchange Fixing (NAFEX), the official exchange rate window. It started the week at N839.48/$ on Monday, increased to N818.99/$ on Wednesday, and closed the week strong at N791.75.

NAFEX serves as the reference rate for spot FX operations in the autonomous FX market, covering various recognized FX trading segments. This includes the inter-bank market, the I&E FX Window, and other approved and recognized trading segments.

While speculators and hoarders are grappling with losses due to the Naira's increasing strength in both markets, stakeholders applauded the efforts of President Bola Tinubu in attracting investors to bring much-needed foreign exchange into the country. Dr. Muda Yusuf, the Chief Executive Officer of the Centre for Promotion of Private Enterprises (CPPE), emphasized the importance of local refining of crude oil to alleviate pressure on the dollar. He suggested that imported refined fuel contributes to the strain on foreign exchange.

Dr. Yusuf spoke on Channels Television, commending President Tinubu's initiatives in seeking foreign direct investment and encouraging long-term capital inflow. He also stressed the urgency of addressing local refining of petroleum products to reduce the reliance on forex, pointing out that spending substantial amounts on importing petroleum products puts undue pressure on the foreign exchange reserves. As refineries become operational, it is expected to ease the strain on foreign exchange, aligning with the president's initiatives to attract investors and promote local refining.