Naira Gains Strength In FX Market, Appreciates To ₦1,120/$

The Nigerian currency, the naira, witnessed a significant appreciation in the parallel foreign exchange (FX) market, reaching ₦1,120 to the dollar on Monday.

This rate reflects a 9.67 percent improvement compared to ₦1,240/$ recorded on April 3, indicating a positive shift in the currency’s value.

According to TheCable, in Lagos, Bureau de Change (BDC) operators, commonly referred to as street traders, set the purchase price of the dollar at ₦1,100 and the selling price at ₦1,120, thereby earning a profit margin of N20 per dollar.

This development is mirrored in the official trading window, where the naira strengthened by 1.63 percent to ₦1,230.61/$, up from N1251.05/$ on April 5.

The official transactions, monitored through the FMDQ Exchange platform overseeing the Nigerian Autonomous Foreign Exchange Market (NAFEM), recorded a substantial trading volume of $125.55 million.

By the close of the trading day, the disparity between the parallel market and the official rates narrowed to N110.61.

Interestingly, this positive trend aligns with Goldman Sachs’ forecast from March 10, which predicted the naira’s appreciation to ₦1,200/$ within a year.

The financial giant acknowledged Nigeria’s progress in navigating through its currency challenges, suggesting an undervaluation of the naira and potential for further appreciation.

Despite the naira’s ongoing depreciation issues, the Central Bank of Nigeria’s (CBN) interventions in the FX market have shown impactful results.

From selling $20,000 to each BDC at ₦1,301/$ in February, the CBN adjusted its sales to $10,000 per BDC at ₦1,251/$ in March.

This rate was further reduced to ₦1,101/$ on Monday, coinciding with the CBN’s announcement of its continued support to the BDCs with $10,000 sales, marking a proactive step towards stabilizing the naira’s value in the FX market.