Naira's value against the US dollar skyrockets, dropping below the N900 to $1.
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Central Bank of Nigeria's decision to address the forex backlog triggered a 15.18% surge in the Naira's value.
Speculators hurriedly exit short positions amidst expectations for further Naira rises.
In a surprising turn of events, the value of the Naira has surged dramatically versus the US dollar, causing tremors in a number of other markets.
The Naira saw a strong comeback as the exchange rate dropped below the N900 to $1 threshold on peer-to-peer (P2P) platforms like Binance for the first time since August 2023.
Compared to the N1,120 it traded for on Thursday, this is a rise of N170, or 15.18%, in the value of the local currency. In addition, the naira is strengthening for the second day in response to the Central Bank of Nigeria's decision on Thursday to reduce part of its foreign exchange backlog.
Data from the well-regarded Binance Crypto trading site indicated that the conversion rate was impressively at N855 to $1 by 6:30 p.m. on Friday. This event demonstrates the Naira's remarkable recuperation path.
Meanwhile, the black market, which is sometimes used as an unofficial barometer of the strength of the currency, has conversion rates for $1 in cash transactions that range from N1000 to N1,100.
Speculators' eagerness to exit their short positions, coupled with their hurry, underlines their expectation of additional rises in the Naira.
On Tuesday, Business Insider Africa reported that the exchange rate between Nigeria's naira and the US dollar has dropped to its lowest level ever on NAFEM, where official forex is sold.
That signified a whopping 20.5% devaluation, the naira's lowest level ever recorded versus the dollar. Previously, the lowest figure was N848/$1 on October 17, 2023, representing a one-day 8.17% devaluation at the time.
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