AGS NEWS – The Nigerian naira saw a slight appreciation against the US dollar on Thursday in the Nigerian Autonomous Foreign Exchange Market, closing at N1,498.25/$ compared to N1,503.38/$ recorded the previous day.

This shift occurred as the Central Bank of Nigeria (CBN) took measures to combat foreign exchange irregularities and financial misconduct by issuing three circulars dated February 14, 2024.

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In the first circular, banks were instructed to cease paying Personal Travel Allowance to customers in cash. The second circular directed International Oil Companies to stagger repatriation of revenue to their parent companies.

The third circular amended guidelines to prevent under-invoicing of exports and over-invoicing of imports.

Despite these actions, the naira remained close to 1,500/dollar at the official market on Thursday, despite a reduction in dollar supply by commercial banks at the spot FX market.

According to data from the FMDQ exchange securities, dollar supply increased to $381.92 million on Tuesday but dropped to $117.87 million on Wednesday from $89.61 million recorded on Monday.

On the parallel foreign exchange market segment, the naira depreciated to N1,600/$. This rate marks an increase of about N97 or 6.45% compared to the N1,503/$ at the start of the week.

Despite efforts by the CBN to curb speculation, Nigerians continued to patronize black market currency traders.

Financial experts, including Johnson Chukwu, Group Managing Director of Cowry Asset Management Limited, had projected the naira’s depreciation to N1,500/$ in 2024.

Currency traders in various regions reported the dollar selling at rates ranging from N1,600 to N1,610.

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A report by Comercio Partners highlighted a significant decline in the naira’s value in 2023, with the official exchange rate falling by 66% from 462 Naira per US dollar to 1041 Naira per US dollar.

The CBN also adjusted the allowable limit of price deviation for exports and imports to -15% and +15% of the global average prices, respectively, due to global inflation and related challenges.

This move aims to address concerns surrounding over-invoicing of imports and under-invoicing of exports.