The Nigerian naira gained ground versus the US dollar on Wednesday at the country’s official foreign exchange window, marking the biggest day-to-day improvement of the week as Nigeria’s external reserves climbed and regulators tightened oversight of parts of the financial sector.
Key takeaways
- At the official FX market, the naira strengthened to 1,372.41 per dollar on Wednesday.
- This represented a daily appreciation of 7.27 naira versus Tuesday’s 1,379.68 rate.
- In the black market, the exchange rate held steady at 1,139.5 per dollar, unchanged from Tuesday.
- Nigeria’s foreign reserves rose to 51.46 billion US dollars.
- The central bank revoked the operating licences of 46 microfinance banks, including Credit and Sycamore, on Wednesday.
Naira posts strongest official-market gain of the week
Central Bank of Nigeria FX figures showed that the naira recorded its sharpest appreciation against the dollar at the official market during the week under review. The currency moved to 1,372.41 per dollar on Wednesday from 1,379.68 traded on Tuesday.
On a day-to-day basis, that shift translated to a strengthening of 7.27 naira against the greenback, the highest improvement recorded across the week’s trading sessions so far.
Unofficial market rate unchanged as reserves rise
Trading conditions in the parallel market were more muted. The naira was quoted at 1,139.5 per dollar on Wednesday, the same level seen on Tuesday, indicating no change in the informal pricing trend over the two days.
The improvement at the official window comes alongside a further increase in Nigeria’s foreign reserves, which climbed to 51.46 billion US dollars. Higher reserve levels can support the supply of foreign currency and help stabilise official exchange rates.
Central bank withdraws licences from microfinance banks
Separately, the central bank took regulatory action on Wednesday by withdrawing licences from 46 microfinance institutions. The move included banks described as operating illegally, as well as Credit and Sycamore banks, according to the report.
